Professional Documents
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Addidas Annual REport 2014
Addidas Annual REport 2014
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ADIDAS GROUP
ANNUAL REPORT
TARGETS – RESULTS – OUTLOOK
TARGETS 2015 1, 2 RESULTS 2015 2, 3 OUTLOOK 2016
€ 16.915 BILLION
Average operating working capital Average operating working capital Average operating working capital
(in % of net sales) (in % of net sales) decreases 1.9pp to (in % of net sales)
TO BE TO BE
MAINTAINED 0.3 MAINTAINED
BELOW 2 BELOW 2
Net income from continuing operations Net income from continuing operations Net income from continuing operations
€ 1.60 4
Share buyback in an amount of
€ 300 MILLION
1 As published on March 5, 2015. The outlook was updated over the course of the year.
2 Figures reflect continuing operations as a result of the divestiture of the Rockport business.
3 Excluding goodwill impairment of € 34 million.
4 Subject to Annual General Meeting approval.
FINANCIAL HIGHLIGHTS 2015
FINANCIAL HIGHLIGHTS 2015 (IFRS)
1 Figures reflect continuing operations as a result of the divestiture of the Rockport business.
2 Includes continuing and discontinued operations.
3 2015 excluding goodwill impairment of € 34 million.
4 2014 excluding goodwill impairment of € 78 million.
5 Subject to Annual General Meeting approval.
OUR BRANDS
&
adidas Originals is the authentic, iconic sportswear label for the street.
adidas Sport Style includes the labels adidas NEO, Y-3 and Porsche Design TaylorMade adidas Golf
Sport by adidas.
TaylorMade leads the golf industry in adidas Golf develops high-performance
metalwood sales and is the number one golf footwear and apparel for active,
driver brand on the world’s six major serious, athletic-minded golfers seeking
professional golf tours. The brand is products to elevate their game.
recognised globally for its capacity to
develop innovative and performance-
enhancing technologies for drivers,
runtastic fairway woods, hybrids, irons, putters
and balls.
Runtastic offers a wide variety of products and services that provide a compre-
hensive ecosystem for tracking and managing health and fitness data. No
matter which fitness activity you prefer, Runtastic helps to motivate and link
like-minded people. Together we are better and the Runtastic community is
the perfect platform for anyone and everyone to reach their full potential.
Adams Golf designs and produces easy- Ashworth is an authentic golf apparel
to-hit equipment that makes playing the and footwear brand with powerful name
game more enjoyable for golfers of all recognition among true, authentic
skill levels. golfers, offering products that move
Five Ten effortlessly from the golf course to the
clubhouse and beyond.
Five Ten, the ‘Brand of the Brave’, is a leader in performance, high-friction
footwear. From downhill mountain bike racing to rock climbing, from
wingsuit flying to kayaking, Five Ten makes footwear for the world‘s most
dangerous sports.
1 5
IS OUR VERY PURPOSE. THROUGH SPORT WE
HAVE THE POWER TO CHANGE LIVES. WE ARE
OBSESSED WITH INSPIRING PEOPLE TO
HARNESS THE POWER OF SPORT IN THEIR LIVES.
WE ARE COMMITTED TO HELPING ATHLETES
MAKE A DIFFERENCE.
VALUE
⁄ ⁄ ⁄ ⁄ ∕ ⁄ ⁄ ⁄ ∕ ⁄ ⁄ ⁄ ⁄
ADIDAS GROUP
ANNUAL
REPORT 2015
1 TO OUR SHAREHOLDERS
Operational and Sporting Highlights 6
Letter from the CEO 10
Executive Board 16
Supervisory Board 18
Supervisory Board Report 20
Corporate Governance Report including the Declaration on Corporate Governance 28
Compensation Report 36
Our Share 46
5 ADDITIONAL INFORMATION
Ten-Year Overview 256
Glossary 260
Declaration of Support 263
Financial Calendar 264
HOW
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ADIDAS GROUP
MAGAZINE
ADIDAS GROUP
ANNUAL REPORT BLY ADIDAS GROUP
SUSTAINABILITY
PROGRESS REPORT
Printed versions of our Annual Report with condensed consolidated financial statements (excluding the Group’s
notes) can be ordered online at WWW.A D I DAS- G RO UP.CO M /E N /I N VE STO RS/FI N AN C I AL-R E P O RT S .
TO
OUR
Operational and Sporting Highlights 6
Letter from the CEO 10
Executive Board 16
Supervisory Board 18
Supervisory Board Report 20
Corporate Governance Report including
the Declaration on Corporate Governance 28
Compensation Report 36
Our Share 46
SHARE –
HOLD –
ERS
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To our S hareholders
Operational and Sporting Highlights
OPERATIONAL AND
SPORTING HIGHLIGHTS
Q1 2015
JANUARY 28.01. 25.02.
Reebok releases its new brand campaign ‘Be TaylorMade launches the new R15 driver. The
19.01. More Human’ with a 60-second TV spot around driver provides a front track technology to expand
adidas Football presents its #ThereWillBeHaters the Super Bowl. The campaign is a rally cry to sweet spot and decrease spin. The R15 is the only
campaign, focused around a provocative video live up to the athlete’s full potential. driver of its kind to earn the maximum number of
featuring global football stars such as Luis points in Golf Digest’s 2015 Hot List.
Suárez, Gareth Bale, James Rodríguez and Karim
Benzema. Within four weeks after its release the
video is watched more than 16 million times on
YouTube.
FEBRUARY
12.02.
adidas Originals and Kanye West stage the global
launch event for the Yeezy Season 1 and the Yeezy
22.01. Boost. This worldwide simulcast event taking MARCH
adidas unveils its latest running revolution: place in New York City is streamed to 42 theatres
UltraBOOST. In New York City, a team of elite across the globe. 04.03.
athletes around Yohan Blake, David Villa and Reebok presents to the world’s media the
Sammy Watkins pledge their allegiance to this ZPump Fusion, a game-changing running shoe
running shoe while hundreds of witnesses from that uniquely conforms to any foot and provides
around the world are on site. runners with a locked-in custom fit.
26.03.
The adidas Group introduces its new strategic
business plan ‘Creating the New’ at the Investor
Day 2015 in Herzogenaurach, Germany. By
bringing brand desirability to new heights,
the Group aims to increase its top line at a
13.02. high-single-digit rate and improve net income
adidas releases its new campaign, Sport 15. The by around 15% on average per year.
campaign, which is a long-term investment in
the brand’s obsession with sport, aims to inspire 27.03.
and motivate young athletes to always be the best adidas Originals releases Supercolor, created
they can be at any sport or at any level. in collaboration with Pharrell Williams. The
iconic Superstar silhouette is transformed via
22.01. a spectrum of 50 different colourways available
The adidas Group ranks third in the ‘Global 100 from the launch day onwards.
Index’ and is thus recognised as one of the 100
Most Sustainable Corporations in the World, as
best European company and as clear leader in
its industry. This ranking by Corporate Knights is
one of the most extensive data-driven corporate
sustainability assessments in existence.
24.02.
adidas announces that in 2014 it sourced more
than 30% of all its processed cotton as Better
Cotton. With this, the Group exceeds its originally
set goal of 25%. This is the highest volume in
sustainable cotton used in the history of adidas.
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To our S hareholders
Operational and Sporting Highlights
OPERATIONAL AND
SPORTING HIGHLIGHTS
Q2 2015
APRIL MAY 25.06.
Reebok takes home two awards at the 2015
15.04. 20.05. Cannes Lions International Festival of Creativity
Reebok teams up with international supermodel In celebration of the ten-year anniversary for the creation of the ‘Be More Human’ digital
Miranda Kerr for the Skyscape March in Tokyo. of the collaboration with Stella McCartney, experience.
The Skyscape is Reebok’s key franchise in the designer visits the first adidas by Stella
walking footwear, taking comfort and style to a McCartney women’s concept store in Seoul to 30.06.
new level. meet with consumers as well as fitness and adidas and Parley for the Oceans present the
health influencers. first shoe developed in their collaboration at a
UN Climate Change event in New York City. The
shoe’s upper is entirely made of yarns reclaimed
and recycled from ocean waste.
24.04.
CCM releases the Ribcor skate line featuring
Reebok’s legendary Pump technology. Providing 25.05.
skaters with a re-engineered shape, Ribcor adidas revolutionises its football footwear offer
features a more customised fit and maximum by introducing X and Ace. The boots represent
heel lock. two distinct types of players: the game changers
and the play makers – the ones who cause chaos 30.06.
and the ones who control the game. Reebok and the UFC unveil the first UFCFightKit
in New York City. The launch marks a cornerstone
moment for both the sport of UFC and the Reebok
brand.
28.04. JUNE
FC Bayern Munich and adidas extend their
successful long-term partnership until 2030. 18.06.
adidas Originals and Kanye West present
the second sneaker developed in their close
collaboration: Yeezy Boost 350. The shoe is
designed to be simple and comfortable, featuring
an entirely knitted upper.
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To our S hareholders
Operational and Sporting Highlights
OPERATIONAL AND
SPORTING HIGHLIGHTS
Q3 2015
JULY 05.08. 10.09.
The adidas Group announces the acquisition of adidas announces a multi-year partnership with
13.07. Runtastic, a leading fitness app provider. With quarterback Aaron Rodgers of the Green Bay
Reebok and CrossFit celebrate five years of more than 140 million downloads and over Packers. The two-time winner of the MVP award
partnership with the launch of the Reebok 80 million registered users, Runtastic has an debuts adidas cleats in the new season and will
CrossFit Nano 5.0, developed in association with industry-leading position. also collaborate on future product development.
the CrossFit community.
10.09.
For the 16th consecutive time, adidas AG is
13.08. selected to join the Dow Jones Sustainability
AUGUST adidas announces its partnership with shooting Indices (DJSI). Within the ‘Textiles, Apparel &
guard James Harden of the Houston Rockets, one Luxury Goods’ industry, the adidas Group is
01.08. of the NBA’s most successful scorers and most rated best in class in the category Innovation
adidas reunites with Manchester United and recognisable players. Management and achieves high scores in further
reveals the new home jersey for the 2015/16 categories.
season. The jerseys are well received and 17.08.
within the first five days deliver sales that were TaylorMade sponsored Jason Day wins the 10.09.
forecasted for a month. 2015 PGA Championship in Whistling Straits/ The adidas Group Annual Report 2014 is ranked
Wisconsin, USA. This victory helps him to second among all DAX-30 companies in the
temporarily take the number one spot in the ‘Best Annual Report’ ranking which focuses
official world golf ranking after also winning on the quality of content and transparency in
further tournaments. reporting. Furthermore, ‘Make a Difference’ wins
the Red Dot award that honours the quality of
communication design and aesthetics.
15.09.
The National Hockey League (NHL) and adidas
announce a seven-year partnership starting with
the 2017/18 season. Shortly afterwards, adidas
announces a multi-year partnership with NHL
All-Star Sidney Crosby.
03.08.
The adidas Group opens a new office building,
PITCH, at the World of Sports in Herzogenaurach. SEPTEMBER
The building will be used to test the Group’s
workplace of the future with creative meeting 09.09.
rooms, latest technology and innovative TaylorMade launches M1, the brand’s longest
recreation zones. driver and most fittable product line. M1 offers
the golfer TaylorMade’s first-ever ’unmetalwood’ 24.09.
line of drivers, fairways and rescue clubs that adidas introduces Sport Infinity, a research
enable more ball speed, forgiveness and distance. project funded by the European Commission
which focuses on sporting goods that can be
fully recycled. Worn sportswear will be broken
down to be remoulded again in a waste-free,
adhesive-free process.
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To our S hareholders
Operational and Sporting Highlights
OPERATIONAL AND
SPORTING HIGHLIGHTS
Q4 2015
OCTOBER 12.11. 07.12.
Only two days after the launch of the new home The adidas Group achieves its target of € 2 billion
07.10. kit of the German national football team for the in net sales in Greater China. In addition, adidas
adidas unveils the future of performance footwear UEFA EURO 2016, adidas reveals the Official is the leading women’s sports brand and the
with Futurecraft 3D, a unique 3D-printed running Match Ball of the group stages: Beau Jeu. The number one sport style and sport casual brand
shoe midsole. The 3D concept is part of the ball is introduced by Zinédine Zidane inside the in Greater China.
‘Futurecraft series’ and drives innovation across world’s first digital football stadium entitled
all elements of production. FUTURE ARENA, visualising a 360° digital 08.12.
football stadium with 50,000 fans inside. adidas and Parley for the Oceans unveil a new
footwear innovation which transforms deep-sea
plastic waste into a 3D-printed midsole. The shoe
also has an upper made from ocean plastic.
23.11.
TaylorMade launches Kalea, a women’s exclusive
19.10. set of clubs that is designed to deliver meaningful
Continuing its passionate commitment to performance to the female player. 09.12.
the growth and support of mixed martial arts adidas Originals launches NMD, its latest
around the world, Reebok announces its latest 26.11. footwear franchise, at an event in New York City.
partnership with undefeated UFC Middleweight CCM introduces its new hockey performance lab The NMD is technically a running shoe, realised
Champion Chris Weidman. in Montreal, Canada. The lab will contribute to as a lifestyle sneaker that represents in its design
game-changing products with the technology past adidas styles of the Micropacer, the Rising
31.10. that has the power to advance the performance Star and the Boston Super.
adidas celebrates the New Zealand All Blacks of hockey and that of the player.
who become the first team to win back-to-back
Rugby World Cups and also to win the competition
three times as they triumph over Australia.
09.12.
adidas reveals the future of production with
DECEMBER its pilot Speedfactory in Germany. With the
use of automated manufacturing production,
02.12. Speedfactory creates high-performance sporting
adidas opens a further chapter of its Sport 15 goods faster than ever before and close to the
campaign with the film ‘Creators never follow’. consumer.
NOVEMBER The film stars James Harden who encourages all
athletes to define their own path. 11.12.
02.11. adidas Golf announces the release of the new
adidas introduces its Laceless football boot. With Tour 360 Boost, the next generation in the
Laceless, players will be able to experience a new popular Tour 360 franchise.
level of fit and pure touch.
19.12.
05.11. adidas Originals concludes the year with the
adidas unveils Futurecraft Leather, a revolutionary release of two more shoes that originate out of
combination of a high-tech manufacturing process the partnership with Kanye West: Yeezy Boost 350
and traditional material to create a completely tan and Yeezy Boost 750 black.
seamless upper that enables flex, support and 03.12.
comfort in one single piece of material. Reebok Instagram reaches 500,000 followers.
The brand has achieved more than 3.8 million
engagements on the account.
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To our S hareholders
Letter from the CEO
LETTER
FROM
THE CEO
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To our S hareholders
Letter from the CEO
2015 was a very successful year for the adidas Group. We reached all of our major financial goals
and even exceeded our initial top- and bottom-line targets. This was made possible because we
reacted like true champions after the severe challenges we had been facing in 2014. We used
our form crisis as an opportunity, analysed our weaknesses, realigned our business, rolled up
our sleeves and took up the fight for gold. As a result, our 2015 performance is a picture-perfect
example of a successful comeback in sport. As a Group, today we are stronger and in better shape
than ever before:
•• In 2015, Group sales increased 10% on a currency-neutral basis. In euro terms, revenues were
up 16% or € 2.4 billion to a new record of € 16.9 billion.
•• Our core brand adidas, by far our largest business, drove the Group’s top-line expansion,
growing 12% currency-neutral and reaching sales of € 13.9 billion in 2015, the highest level
ever, with momentum accelerating towards the end of the year. This was particularly visible in
Western Europe and North America, where revenues grew 31% and 12%, respectively, during
the fourth quarter.
•• Reebok reported a 6% sales increase for the full year and now has eleven consecutive quarters
of growth under its belt.
•• Our underlying net income grew 12% to € 720 million, despite delivering on our promise to
significantly step up marketing investments to spur revenue growth and drive long-term brand
desire.
•• With an increase of 56%, our share was not only the top performer in the DAX-30 in 2015, but
also outperformed all major peers and reached a new all-time high towards the end of the year.
These financials provide clear evidence for the major progress the Group has made over the past
15 months. But our success goes way beyond financial figures.
With our strategic business plan ‘Creating the New’, we have developed a new game plan aimed
at accelerating our growth trajectory until 2020 by significantly increasing brand desirability. And
while officially this plan only kicked in at the beginning of 2016, Creating the New has already
set free a lot of positive energy within our Group during the past year. This is the result of a
completely new mindset – brands first – which we are living internally and which is also reflected
in the reorganisation of roles and responsibilities within our sales and marketing organisations.
Following the implementation of ‘Brand Leadership’, today our Global Brands organisation has a
centralised role when it comes to key decision-making relating to the appearance of our brands and
products around the globe. With this approach, we ensure that our product offering enjoys a high
level of commonality worldwide, while at the same time we guarantee that major initiatives such
as product launches and communication activities are managed centrally before they are executed
locally by the markets. I have absolutely no doubt that this new consumer-obsessed mindset and
organisational structure spurred our success in 2015 as it helped us to be much more impactful
vis-à-vis the consumer in many areas of our business.
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To our S hareholders
Letter from the CEO
In this regard, we also started to redefine the future of production by building our pilot Speedfactory
in Germany. Using automated manufacturing to bring production to where the consumer is,
Speedfactories will make high-performance sporting goods available faster than ever before. The
first concept shoes for running footwear are currently being made and I am proud that the adidas
Group is at the forefront of this trend, as it will enable us to be closer to the consumer than any
other brand.
Another prime example of our consumer-obsessed mindset is our football category: 2015 saw a
full reset of our football footwear business with the launch of Ace and X. These new football silos
successfully replaced our iconic franchises f50, Predator, 11Pro and Nitrocharge. Focusing on the
specific needs of two different types of football consumers was a bold decision that came with some
risk. But it proved to be right, as evidenced by the double-digit increase in football footwear revenues
last year. In addition, we saw a strong presence of our new cleats in the world’s top five football
leagues, with almost 40% of players wearing 3-Stripes. All of this drove significant market share
gains during the course of the year, particularly in Western Europe. This alone is great news. But
even more importantly, it also confirms that Creating the New helps us win in this tough battlefield.
In 2015, we also made a bold statement in another major performance category, running, where
we launched UltraBOOST, which delivers unrivalled energy return, superior support and adaptive
comfort to consumers. As we were so convinced of the performance attributes of this shoe, we
called UltraBOOST ‘the greatest running shoe ever’ even before it hit the market at the beginning
of 2015. Now, a year after its official launch, there is no better description for UltraBOOST than
just that. Both the feedback we get from consumers as well as the sell-through rates we achieve
leave no doubt that UltraBOOST was the ‘Best Sneaker of 2015’, as awarded by both running and
lifestyle magazines several times throughout the year.
Speaking about the fusion of lifestyle and sport: The tremendous success of our Originals business
lies in our unique ability to recreate iconic sports moments and bring them to the street. This is
exactly what made our iconic footwear franchises Stan Smith and Superstar driving forces of
sneaker culture in 2015. In addition, our newly introduced NMD, a fusion of well-proven adidas
DNA with breakthrough technology from today, has once again demonstrated the trendsetting
capabilities and influence adidas Originals has on the streets. And not to forget the unprecedented
demand around Yeezy Boost 350, which received the prestigious Footwear News ‘Shoe of the Year’
award. It is product launches like these that helped adidas Originals to become the world’s most
relevant and best sneaker brand and deliver strong double-digit growth in every quarter of 2015.
2015 saw the complete reset of our Women’s business. As a result, we are now more focused on
the female athlete than ever before. We are excited about our collaboration with former lululemon
CEO Christine Day, who has been acting as a strategic adviser to our Women’s business for almost a
year now. As an expert in building an athletic brand for women, Christine has been instrumental in
sharpening our game plan, asking the right questions and helping us develop this important part of
our business in the right way. As a result, we have made significant changes to our global product
and marketing approach to enable us to create products and consumer experiences that address the
very needs of women. As part of these efforts, adidas recently launched its first-ever women’s-only
running shoe, PureBOOST X. In addition, our new Sport 16 campaign, ‘I’m Here to Create’, is told
exclusively through the lens of some of the world’s finest female athletes, including tennis icon
Caroline Wozniacki, supermodel Karlie Kloss as well as a large number of local influencers such
as US rock climbing star Sasha DiGiulian and inspirational yogi Adriene Mishler.
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Letter from the CEO
North America is another area where the adidas brand made major progress last year by moving
closer to the consumer. One of our main priorities in 2015 was to gain credibility in those categories
that are important to authenticate our brand towards the US athlete. And indeed, through grassroots
events at the high school and college level, much higher visibility in all of the major US sports and
highly engaging marketing campaigns, we have become much more relevant for the US consumer in
only a short period of time. In American football, for example, our partnership with Denver Broncos’
Von Miller, the most valuable player in Super Bowl 50, put the 3-Stripes right into the spotlight
during the world’s biggest single sports event. In baseball, the number of players wearing our
products has more than doubled within less than twelve months and now includes standouts such
as the 2015 Rookies of the Year Kris Bryant and Carlos Correa. And in basketball, we have teamed
up with James Harden, one of the most iconic players in the game, who has already created a lot
of buzz for us as he took centre stage in the last episode of our Sport 15 campaign in December.
And let’s of course not forget our unrivalled presence in the lifestyle area, where the Yeezy Boost
in collaboration with Kanye West is enjoying unparalleled popularity. The sneaker’s iterations, of
which seven have been released so far, have not only sold out instantly but also played a major role
in propelling adidas to the most popular sneaker brand on Instagram in 2015.
The major progress hasn’t gone unnoticed by the country’s most important retailers. They have
become much more supportive of our products over the past twelve months, which is reflected in
a significant increase in shelf space in their stores. In combination with the continued roll-out of
our own-retail stores, this has also elevated the brand experience at the point of sale remarkably.
So without a doubt, we have delivered on our US promise across all the different dimensions.
18 months ago, we declared the US as the most important priority for us as a management team.
And it makes me proud to see the momentum the adidas brand has gained in this all-important
market.
Turning to Reebok’s performance in more detail, the brand now looks back on eleven consecutive
quarters of growth, which is proof positive of the successful repositioning of the brand and its
rededication towards fitness. To celebrate this achievement and to illustrate Reebok’s mission to
change how people perceive and experience fitness, the brand launched its new, fully integrated
marketing campaign, ‘Be More Human’, at the beginning of 2015. The campaign underlines that,
through a strong focus on innovation, Reebok is today leading the way in new fitness movements
and further strengthening its overall fitness positioning across the globe, underlined by double-
digit growth in nearly all markets in 2015. At the same time, the brand continues to face challenges
in its home market. To reset the brand in North America and deliver sustainable and profitable
business growth going forward, we have started to streamline Reebok’s distribution footprint in
this all-important market by reducing the number of factory outlets. We will continue to pursue
that path in 2016. At the same time, we will introduce new concepts to better identify and connect
with our target consumer.
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To our S hareholders
Letter from the CEO
2015 has also seen two important portfolio decisions. On the one hand, we completed the divestiture
of Rockport, which allows us to focus our resources even more on our core competency – sport – and
on the highest-potential opportunities for our Group. On the other hand, we have strengthened
our digital activities with the acquisition of Runtastic. Their cutting-edge digital capabilities are
enabling us to create unexpected sports experiences that will resonate with our consumers and
clearly stand out in a crowded and constantly changing landscape.
Another important strategic decision will be made shortly. Following a decade of strong and
profitable growth, TaylorMade-adidas Golf experienced two very difficult years in 2014 and 2015,
caused by a number of structural, commercial and operational issues. As a result, halfway through
last year we started analysing future options for our golf business. This strategic review is expected
to be concluded by the end of the first quarter of 2016. At the same time, we also initiated a
major restructuring programme, with the main objective to create a more nimble and profitable
organisation. In the meantime, we have seen very good response to our latest product launches. In
its inaugural week, on both the PGA Tour and European Tour, TaylorMade’s M1 driver has become
the number one played model. In addition, a multitude of players made an immediate switch based
on the impressive results they saw in testing – a true testament to the unrivalled performance of
M1 in its maiden week on tour. But the M1 was not only successful with our tour staff. Due to the
strong early demand and quick sell-through at retail, our launch quantities for the M1 were sold
out quickly after its launch and much faster than we had anticipated. But unlike in the past, we
have decided not to push further volumes into the market, in order to keep the product fresh and
demand high for the next drop in the first quarter of 2016.
Summing it all up: We are in great shape and well prepared to fully compensate the cost pressure
that we and the entire industry will be facing in 2016 as a result of a surge in input costs due
to labour cost increases in our supply chain as well as the strong appreciation of the US dollar
against most major currencies. But make no mistake, the measures we have implemented to
counterbalance this year’s macroeconomic headwinds are not oriented towards the short term as
we will definitely not sacrifice the long-term development of the Group and the desirability of our
brands for short-term margin optimisation. In fact, the opposite is true. All of the initiatives aiming
to support our margin development in 2016 will sustainably increase our operating efficiency and
significantly strengthen our foundation for profitable growth in the future. At the same time, in line
with our firm belief that the desirability of our brands and products will be the decisive factor to
significantly increase revenues and profits over time, we will further increase our brand-building
investments this year.
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To our S hareholders
Letter from the CEO
I have no doubt that 2016 will be another important and successful stage in our race to become
the best sports company in the world and achieve the Group’s long-term financial ambition. Our
brands are benefiting from the ever-increasing relevance of sport in the lives of people around the
globe. Our products are in high demand with consumers in every part of the world. Our order books
are full across all major performance and lifestyle categories. And our brands are set to shine at
this year’s major sporting events. This gives us every confidence that we will again grow the top
and bottom line at a double-digit rate this year and continue to create significant value for you.
H E R B E RT H A I NE R
adidas Group CEO
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To our S hareholders
E xe cuti ve B o a rd
EXECUTIVE BOARD
2 1
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To our S hareholders
Executive Board
3
Robin J. Stalker is also:
GLENN BENNETT GLO BAL O P E R AT IO N S
•• Member of the Supervisory Board, Schaeffler AG, Herzogenaurach, Germany
Glenn Bennett was born in New Hampshire, USA, in 1963.
With a degree in computer science, he began his professional career
with Reebok International Ltd. in 1983, where he worked in various
operations and product functions, of which the latest was Director
of Footwear Development. In 1993, Glenn Bennett joined adidas AG
and began working as the Head of Footwear Development. He
was subsequently promoted to Senior Vice President of Footwear
Operations and, in 1997, appointed to the Executive Board where his
responsibilities were expanded to include Footwear, Apparel and FOR MORE INFORMATION ON THE
Accessories & Gear Development, Global Sourcing, Supply Chain ADIDAS GROUP’S EXECUTIVE BOARD:
Management and, most recently, IT. Glenn Bennett is married, has WWW.ADIDAS-GROUP.COM /
one daughter and lives in Boston/Massachusetts, USA. EXECUTIVE-BOARD
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Supervisory Board
SUPERVISORY BOARD
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To our S hareholders
Supervisory Board
STANDING COMMITTEES
Steering Committee — Igor Landau (Chairman), Sabine Bauer *, Willi Schwerdtle
General Committee — Igor Landau (Chairman), Sabine Bauer *, Roland Nosko*, Willi Schwerdtle
Audit Committee — Herbert Kauffmann (Chairman), Dr. Wolfgang Jäger*, Dr. Stefan Jentzsch, Hans Ruprecht *
Finance and Investment Committee — Igor Landau (Chairman), Sabine Bauer *, Dr. Wolfgang Jäger *, Herbert Kauffmann
Mediation Committee pursuant to § 27 section 3 Co-Determination Act (MitbestG) — Igor Landau, Sabine Bauer *,
Willi Schwerdtle, Heidi Thaler-Veh*
* Employee representative.
1 Since April 21, 2015.
2 Until September 18, 2015.
3 Until January 12, 2016.
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Supervisory Board Report
SUPERVISORY
BOARD REPORT
IGOR LANDAU
CHAIRMAN OF THE SUPERVISORY BOARD
DEAR SHAREHOLDERS,
We look back on 2015 as a very successful financial year. Thanks to strong brands and partnerships in the world
of sport, as well as first-class innovations, the adidas Group was able to achieve strong sales and earnings
growth. Despite the continuing weakness of the golf market worldwide and the resulting unsatisfactory
business development of TaylorMade-adidas Golf, on a Group level the sales and earnings targets set at the
beginning of the year were exceeded. The strong momentum currently experienced by adidas and Reebok
around the globe has contributed significantly towards this. In addition to some initial visible successes
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in North America, this primarily reflects double-digit growth rates in Western Europe, Greater China and
numerous other emerging markets in which the Group is superbly positioned. Additionally, in the past
year, the company introduced its new strategic business plan ‘Creating the New’ for the period until 2020.
Through a substantial increase in the brands’ desirability, the Group aims to significantly improve sales and
earnings over the next five years. And in the short term as well, in light of upcoming product launches and
the presence of our brands at numerous high-profile sports events, our Group is extremely well positioned
to continue growing profitably this year.
The Executive Board involved us directly in all of the Group’s fundamental decisions. After in-depth consultation
and examination of the detailed information submitted to us by the Executive Board, we approved individual
transactions where required by law.
The Executive Board informed us extensively and in a timely manner through written and oral reports at our
Supervisory Board meetings. This information covered all relevant aspects of the Group’s business strategy,
business planning, including finance, investment and personnel planning, the course of business and the Group’s
financial position and profitability. We were also kept up to date on matters relating to the risk situation, risk
management and compliance as well as all major decisions and business transactions.
The Executive Board always explained immediately and in a detailed manner any deviations in business
performance from the established plans, and the Supervisory Board as a whole discussed these matters
in depth.
The Executive Board regularly provided us with comprehensive reports for the preparation of our meetings. We
thus always had the opportunity to critically analyse the Executive Board’s reports and resolution proposals
within the committees and within the Supervisory Board as a whole and to put forward suggestions before
resolving upon the Executive Board’s proposals after in-depth examination and consultation. In the periods
between our meetings, the Executive Board also provided us with extensive, timely monthly reports on the
current business situation.
In the year under review, we held five regular meetings of the entire Supervisory Board as well as one
extraordinary meeting by way of a conference call. Apart from two of these meetings which one Supervisory
Board member and one meeting which two Supervisory Board members were prevented from attending due to
other business appointments which could not be postponed, all members of the Supervisory Board attended the
meetings. The average attendance rate at meetings of the entire Supervisory Board was therefore just under
93%. All the committee meetings, with the exception of one Audit Committee meeting at which one member was
absent, were fully attended. The external auditor, KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG), attended
all regular meetings of the Supervisory Board, inasfar as no Executive Board matters were dealt with. KPMG
also attended all meetings of the Audit Committee. The employee representatives held separate meetings to
prepare and discuss agenda items for all meetings of the entire Supervisory Board.
In the periods between meetings, the Supervisory Board Chairman and the Audit Committee Chairman
maintained regular contact with the Chief Executive Officer and the Chief Financial Officer, conferring on matters
such as corporate strategy, business development and planning, the risk situation and risk management as
well as compliance. In addition, the Executive Board immediately informed the Supervisory Board Chairman
about any significant events of fundamental importance for the management and for evaluating the situation
and development of the company.
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In February 2015, the Executive Board presented us with details of the new strategic business plan Creating the
New for the period until 2020, established on the three key strategic pillars of Speed, Cities and Open Source.
At our meeting in March, we reviewed and dealt intensively with the KPMG-certified 2014 annual financial
statements and consolidated financial statements, including the combined management report for adidas AG
and the Group, as well as the Executive Board’s proposal regarding the appropriation of retained earnings. At
this meeting as well as the meeting in May, we dealt in detail with the subject of retail profitability.
At the meetings held in August and November, the Executive Board provided us with comprehensive information
on the continuing weakness of the golf market worldwide and the resulting unsatisfactory business development
for TaylorMade-adidas Golf in the 2015 financial year. The Executive Board provided us at both these meetings
with an extensive outlook on the expected sales development of the golf business and informed us regarding
the restructuring measures already undertaken. Following intensive discussions, we then approved the same. In
November, the Executive Board reported on the major changes to the business model resulting from the Speed
pillar of the 2020 strategic business plan. Furthermore, the Executive Board reported extensively on the measures
the company had since taken to redress the allegations of, in some cases, adverse working conditions under
the temporary work agencies used by the company at the Central Distribution Centre (CDC) in Rieste, Germany.
The topic of our February meeting was, after thorough discussion, the resolution on the 2015 Budget and
Investment Plan presented by the Executive Board. In March, we resolved upon the resolutions to be proposed
to the 2015 Annual General Meeting, including the proposal regarding the appropriation of retained earnings
for the 2014 financial year as well as the proposal to approve the compensation system for the members of
the Executive Board.
At the meetings in March and November, the Executive Board reported on the investment into the extension
of office buildings at the World of Sports on the Herzogenaurach campus, which we approved in November
after in-depth consultation and discussion. At our meeting in May, we discussed the strategic and financial
advantages of acquiring the hitherto rented, strategically important distribution centre in Chekhov, Russia,
which we approved in the interest of optimising profitability. At the August meeting, we discussed in detail the
Executive Board’s planned acquisition of all shares in runtastic GmbH, Austria, which, with its comprehensive
app portfolio, enables the company to further expand its digital marketing. We then approved the acquisition
at a purchase price of € 220 million.
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At our November meeting, after in-depth consultation we resolved to renew Roland Auschel’s mandate as
member of the Executive Board and to extend his Executive Board service contract. With this personnel decision,
we acknowledged his performance and ensured continuity on the Executive Board.
At our meeting in January 2016, we extensively discussed the resolution proposal prepared by the General
Committee on the appointment of a successor for the long-standing Chief Executive Officer Herbert Hainer.
Following in-depth consultation, we resolved to appoint Kasper Rorsted as full member of the Executive Board
with effect from August 1, 2016 and as Chief Executive Officer with effect from October 1, 2016. As Kasper
Rorsted is already available to assume his new position from this summer, Herbert Hainer agreed to relinquish
his Executive Board mandate effective September 30, 2016.
In line with the German Corporate Governance Code (hereinafter referred to as the ‘Code’), in the year under
review we commissioned an external, independent compensation expert to review the Executive Board
compensation system and the individual compensation of the Executive Board members. The review found
that the compensation structure is oriented towards sustainable development of the company and that it
meets statutory requirements as well as those of the Code. It furthermore found that the target compensation
of the Executive Board members is considered appropriate as defined by the German Stock Corporation
Act (Aktiengesetz – AktG) and the Code, but also that a comparison with other companies reveals above all
a need to address the pensions granted to the Executive Board members. Also regarding the fixed annual
compensation of some individual members of the Executive Board, the review showed that there is room for
a moderate increase in order to ensure competitive compensation. At the meetings of the General Committee
and of the Supervisory Board as a whole in October and November, the members of the Supervisory Board
considered in detail the results of the review and agreed with the assessment of the compensation expert. The
Supervisory Board therefore resolved upon the necessary adjustments to the annual fixed salary with effect
from the 2016 financial year as well as upon a change in the structure of the pensions granted.
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At our meeting in February 2016, we considered in depth the performance of each Executive Board member in
the year under review and then resolved upon the 2015 Performance Bonuses to be granted to them.
Detailed information concerning Executive Board compensation can be found in the Compensation Report.
SEE COMPE N SATION RE PORT, P. 3 6
CORPORATE GOVERNANCE
The Supervisory Board regularly monitors the application and further development of the corporate governance
regulations within the company, in particular the implementation of the regulations of the Code. At the
meeting in February, we discussed in depth the introduction of a severance payment cap and the inclusion of
corresponding provisions in all new or extended Executive Board service contracts in the future. At the same
meeting, we furthermore decided to also include a cap on other minor benefits in all new or extended Executive
Board service contracts in the future, thus implementing a further recommendation of the Code. As Supervisory
Board elections had taken place in May 2014, at the February meeting we also discussed again and updated
the objectives the Supervisory Board had set for its composition in the 2013 calendar year. Additionally, we
included inter alia the objective that a woman must be represented on the Nomination Committee.
At our meeting in August, we discussed the amendments made to the Code by the Government Commission on
the German Corporate Governance Code on May 5, 2015 concerning the professionalisation of the Supervisory
Board. We furthermore resolved on the implementation of an efficiency examination by means of a questionnaire
and involving an external consultant.
At our November meeting, we resolved upon an intra-year amendment to the Declaration of Compliance from
February 12, 2015. The amendment was necessary in light of our resolution to convert the hitherto defined
benefit pension plans into defined contribution pension plans for the Executive Board members who were first
appointed on or after October 1, 2013.
At our meeting in February 2016, we discussed in depth the contents of the Declaration of Compliance which
must be issued each year. By way of circular resolution, we resolved upon the Declaration on February 15, 2016,
which we then made permanently available to our shareholders on our website. WWW.ADIDAS- GROUP.COM/S/
CORPOR ATE- G OV E RN AN C E
In the year under review, no conflicts of interest arose with regard to the Executive Board members. With the
exception of the following matter, there were also no conflicts of interest within the Supervisory Board.
In the first quarter of 2015, following extensive discussions at its meetings, the Supervisory Board gave its
approval to one project-specific consulting contract and two project-specific, fixed-term service contracts with
two companies in which in each case one Supervisory Board member has an interest. In order to avoid conflicts
of interest, the two Supervisory Board members concerned participated neither in the respective discussions
nor in the resolutions. The consulting contract was terminated by the company with effect from June 30, 2015.
As the fixed-term service contracts expired at the end of the year under review, in December 2015 and under
exclusion of the Supervisory Board member concerned, by way of circular resolution we approved the conclusion
of a new framework contract starting in January 2016.
Further information on corporate governance at the adidas Group can be found in the Corporate Governance
Report including the Declaration on Corporate Governance. SEE CORPOR ATE G OVERNANCE REPORT INCLUDING
TH E D EC LAR ATION ON CORPOR ATE G OVE R N AN C E , P. 28
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dissolved at the November meeting of the Supervisory Board upon completion of the project. The committees
prepare resolutions of the Supervisory Board as well as topics for Supervisory Board meetings. Within the
legally permissible framework and in appropriate cases, we have furthermore delegated the Supervisory Board’s
authority to pass certain resolutions to individual committees. With the exception of the Audit Committee, the
Supervisory Board Chairman also chairs all the standing committees. The committee chairpersons inform
the Supervisory Board about the content and results of the committee meetings at the subsequent meeting
of the entire Supervisory Board.
• The Steering Committee did not meet in the year under review.
• The General Committee held eight meetings in the 2015 financial year. One additional meeting, dealing
with topics of the year under review, took place in February 2016.
The main focus of the meetings of the General Committee was the preparation of the resolutions of the
Supervisory Board as a whole, detailed individually above. For the resolution of the Supervisory Board on the
variable compensation components, the General Committee dealt comprehensively with the performance of
the Executive Board members in the 2014 and 2015 financial years, and furthermore prepared proposals for the
new performance criteria and individual target bonuses for the variable compensation components applicable
as of the 2015 financial year, such as the LTIP 2015/2017 and the 2015 Performance Bonus Plan. The committee
furthermore prepared the resolution of the Supervisory Board on reviewing the appropriateness of Executive
Board compensation and on setting a target figure for the future representation of women on the Executive
Board. Based on detailed analyses and sector comparisons conducted by an external compensation consultant,
the General Committee prepared a resolution proposal for restructuring the Executive Board pension scheme.
Starting in February, in consultation with a high-profile external executive search firm, the General Committee
dealt intensively with the search for a suitable successor for the long-standing Chief Executive Officer Herbert
Hainer. Based on a requirements profile developed by the Supervisory Board, the General Committee met with
several selected candidates in person and convinced itself of their qualifications and suitability before, following
in-depth discussions at its meeting in November, preparing a resolution proposal for the Supervisory Board.
• The Audit Committee held five meetings in the year under review. One additional meeting, dealing with
topics of the year under review, took place in February 2016. The Chief Financial Officer and the auditor were
present at all meetings and reported to the committee members in detail.
In addition to the supervision of the accounting process, the committee’s work focused on the comprehensive
review of the first quarter report, the first half year report and the report on the first nine months together
with the Chief Financial Officer and the auditor before the respective dates of publication, also the preliminary
examination of the annual financial statements and the consolidated financial statements for 2014, including the
combined management report of adidas AG and the Group, as well as the Executive Board’s proposal regarding
the appropriation of retained earnings. Following an in-depth review of the audit reports with the auditor, the
committee decided to recommend that the Supervisory Board approve the 2014 annual financial statements
and consolidated financial statements. In addition, after obtaining the auditor’s declaration of independence,
the Audit Committee prepared the Supervisory Board’s proposal to the Annual General Meeting concerning the
selection of the auditor of the annual financial statements and the consolidated financial statements for 2015.
Following extensive discussion by the committee, the priority topics for the audit of the 2015 annual financial
statements and consolidated financial statements were determined and the audit assignment was granted
together with the corresponding audit fee.
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As in previous years, the meeting in September focused on examining the efficiency of the internal audit
system, the internal control system and the risk and compliance management system. In the context of this
examination, the committee members reviewed in depth the main risk factors for the Group, the applied control
methods and reporting systems and the efficiency thereof with the aid of written and oral reports. In the course
of the following comprehensive discussions, inter alia with the auditor, the committee members assured
themselves of the effectiveness of the systems and discussed possibilities for improvement. Furthermore, the
2015 audit report and the draft of the 2016 audit plan of Internal Audit were discussed in detail. Additionally,
the committee resolved upon the implementation of an efficiency examination of its activities, the results of
which were presented to the committee at its meeting in November.
The reporting of the Chief Compliance Officer was a topic at every meeting of the Audit Committee. At the
September meeting, he reported extensively on the independent audit conducted at the Central Distribution
Centre in Rieste in order to bring clarity regarding accusations of, in some cases, adverse working conditions,
and about the countermeasures to be taken.
• The Finance and Investment Committee held six meetings in the year under review, two of which were
held by way of a conference call.
At the meetings in the first quarter, the committee extensively discussed the commencement of a second
tranche of a share buyback programme based on the authorisation granted by the Annual General Meeting
in May 2014, and approved the proposal of the Executive Board to repurchase up to a maximum of six million
shares in the period between March 6 and July 3, 2015 at an overall purchase price of up to € 300 million. At the
August meeting, the committee discussed in detail the potential acquisition of runtastic GmbH, Austria, and
recommended that the Supervisory Board approve the acquisition at an overall purchase price of € 220 million.
Following extensive discussions, at the November and December meetings the committee members granted
approval for certain capital increases for Group subsidiaries.
• The Mediation Committee, established in accordance with the German Co-Determination Act
(Mitbestimmungsgesetz – MitbestG), had no reason to convene in 2015.
• The Nomination Committee did not meet in the year under review.
• The ‘Relay’ Committee, which was established for the sale of the Rockport brand, did not meet in the year
under review.
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EXPRESSION OF THANKS
On behalf of the Supervisory Board, I wish to thank the Executive Board and all adidas Group employees
around the world for their tremendous personal dedication and their ongoing commitment, and I also thank
the employee representatives for their good collaboration.
IG O R LA NDAU
Chairman of the Supervisory Board
March 2016
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Corporate Governance Report including the Declaration on Corporate Governance
CORPORATE GOVERNANCE
REPORT INCLUDING THE
DECLARATION ON
CORPORATE GOVERNANCE 1
Corporate governance stands for responsible and transparent management and corporate control
oriented towards a sustainable increase in value. We are convinced that good corporate governance is
an essential foundation for sustainable corporate success and enhances the confidence placed in our
Group by our shareholders, business partners, employees and the financial markets. The following
report includes the Corporate Governance Report and the Declaration on Corporate Governance
issued by the Executive Board and Supervisory Board.
Irrespective of the Executive Board’s overall responsibility, its members are individually responsible for
managing their respective business areas in accordance with the Executive Board’s Business Allocation
Plan. There are no Executive Board committees. The CEO is responsible in particular for leading the entire
Executive Board as well as for guiding business development, including the coordination of the business
segments, brands and markets. The members of the Executive Board keep each other informed on all
significant developments in their business areas and align on all cross-functional measures. Further details
on collaboration within the Executive Board are governed by the Rules of Procedure of the Executive Board
and the Business Allocation Plan. These documents specifically stipulate requirements for meetings and
resolutions as well as for cooperation with the Supervisory Board.
At the Supervisory Board meetings, the Executive Board reports in writing and orally on the agenda items
and resolution proposals and answers all questions from the individual Supervisory Board members. The
CEO and the CFO maintain regular contact and consult with the Chairman of the Supervisory Board and
the Audit Committee Chairman on key aspects of strategy, planning and business development as well as
on questions of risk management and compliance within the Group.
1 The Corporate Governance
Report including the Declaration
on Corporate Governance is an
unaudited section of the Group
Management Report.
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The Supervisory Board, however, cannot influence the selection of candidates for employee representatives
on the Supervisory Board.
In the new version dated May 5, 2015, the Code contains an additional recommendation on specifying
a regular limit of length of membership for Supervisory Board members. However, at its meeting on
February 10, 2016, the Supervisory Board resolved not to follow this recommendation, as a general limit
would not take into consideration specific factors which might justify an extended length of membership of
individual Supervisory Board members in the interest of the company and from the point of view of those
entitled to elect members to the Supervisory Board.
The members of the Supervisory Board have the knowledge, skills and professional expertise required
to properly perform their tasks. As they have extensive knowledge of various professional fields, and in
some cases also many years of international experience, they bring a broad spectrum of expertise to the
performance of their Supervisory Board function. The number of female Supervisory Board members
currently amounts to four. Assuming all of the employee representatives also in principle meet the
independence criteria for Supervisory Board members as defined by the Code, in the Supervisory Board’s
assessment, all of its members are independent. The members of our Supervisory Board do not exercise
directorships or similar positions or advisory tasks for key competitors of the company. Further, they do
not have business or personal relations with adidas AG, its Executive Board and Supervisory Board or a
controlling shareholder which may cause a substantial and not merely temporary conflict of interest. The
age limit of, in general, 72 years at the time of election was taken into account in the selection process.
The composition of the Supervisory Board consequently fully complies with the set objectives resolved on
February 11, 2015.
The personal qualification of the Supervisory Board members also remains the basis for every Supervisory
Board function. Therefore, other important criteria will also be considered when nominating candidates
for election. Personality, integrity and sufficient diversity in terms of expert and industry knowledge as
well as particular experience, e.g. in the fields of accounting or annual auditing, will continue to be taken see Supervisory Board, p. 18
into account as at present. These are important preconditions for the Supervisory Board to work together www.adidas-group.com/s/
productively and to competently supervise and advise the Executive Board. The best interests of the company supervisory-board
will continue to play a decisive role when nominating candidates for election.
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The Supervisory Board supervises and advises the Executive Board in questions relating to Group
management. The Executive Board regularly, expeditiously and comprehensively reports on business
development and planning as well as on the risk situation including compliance and coordinates the strategy
of the company and its implementation with the Supervisory Board. The Supervisory Board examines and
approves the annual financial statements of adidas AG and the adidas Group, taking into consideration the
auditor’s reports, and resolves upon the proposal of the Executive Board on the appropriation of retained
earnings. Additionally, it resolves upon the resolution proposals to be presented to the Annual General
Meeting. Certain business transactions and measures of the Executive Board with fundamental significance
are subject to prior approval by the entire Supervisory Board or by a Supervisory Board committee.
The Supervisory Board is also responsible for the appointment and dismissal of members of the Executive
Board. When appointing members of the Executive Board, the Supervisory Board pays attention to the best
possible composition of the Executive Board. Inter alia, experience, industry knowledge as well as personal
and expert qualifications play an important role in this regard.
The Supervisory Board further determines the Executive Board compensation system, examines it regularly
and decides on the individual overall compensation of each Executive Board member. To this end, the
relation between Executive Board compensation and that of senior management and employees overall
is taken into account, also in terms of its development over time. Further information on Executive Board see Compensation Report, p. 36
compensation is compiled in the Compensation Report.
In order to increase the efficiency of its work and to deal with complex topics, the Supervisory Board has
formed six permanent expert committees from within its members, which, inter alia, prepare its resolutions
and, in certain cases, pass resolutions on its behalf. These committees are the Steering Committee,
the General Committee, the Audit Committee, the Finance and Investment Committee, the Mediation
Committee in accordance with § 27 section 3 MitbestG and the Nomination Committee. The chairmen of
the committees report to the entire Supervisory Board on the results of the committee work on a regular see Supervisory Board, p. 18
basis. The composition of the committees can be found in our overview of the Supervisory Board. Further www.adidas-group.com/s/
information on the committees’ tasks is available on our website. supervisory-board-committees
Apart from the tasks and responsibilities, the Rules of Procedure of the Supervisory Board and of the
Audit Committee also set out the individual requirements expected of the members and the procedure for
meetings and passing resolutions. These Rules of Procedure are available on our website. The Supervisory
Board Report provides information on the activities of the Supervisory Board and its committees in the s ee Supervisory Board
year under review. Report, p. 20
The members of the Supervisory Board are individually responsible for undertaking any necessary training
and professional development measures required for their tasks and, in doing so, are supported by
adidas AG. The company informs the Supervisory Board regularly about current legislative changes as well
as opportunities for external training, and provides the Supervisory Board with relevant specialist literature.
Every two years, the Supervisory Board and the Audit Committee examine the efficiency of their work by
means of questionnaires and individual interviews. As a result, suggestions for even better cooperation
can be made. The last efficiency examinations were conducted in 2015. The analysis of the questionnaires
was carried out by an external consultant. At the meetings of the Supervisory Board and Audit Committee
in November 2015, the results of the efficiency examinations were presented and discussed. No major
efficiency deficits were identified for either body.
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Pursuant to the German ‘Law on Equal Participation of Women and Men in Leadership Positions in the
Private and Public Sector’, which came into force on May 1, 2015, the executive boards and supervisory
boards of certain companies in Germany are required for the first time to set objectives for the percentage
of female representation on the supervisory board, the executive board and the two management levels
below the executive board, and to specify a deadline for implementing the individual percentage of female
representation. The companies had to set their objectives including the implementation deadlines by
September 30, 2015. Under the law, the first implementation deadlines for the objectives had to be no
later than June 30, 2017. For the percentage of female representation on the supervisory boards of publicly
listed and co-determined companies such as adidas AG, the law stipulates that a mandatory minimum
representation of 30% women and 30% men when filling Supervisory Board positions has to be observed
from January 1, 2016. Since the 2014 Annual General Meeting, the female representation on our Supervisory
Board amounts to 30%.
On August 5, 2015, the Supervisory Board of adidas AG resolved to appoint a woman to the Executive Board
of adidas AG by June 30, 2017 at the latest.
On July 2, 2015, the Executive Board of adidas AG resolved to increase the female representation on
the first management level below the Executive Board in Germany to 18% by June 30, 2017. The female
representation on the second management level below the Executive Board is to be increased to 30% within
the same implementation period.
In 2015, no directors’ dealings pursuant to § 15a German Securities Trading Act (Wertpapier
handelsgesetz – WpHG) were reported to the company. A detailed overview of directors’ dealings reported www.adidas-group.com/s/
to adidas AG since 2008 is published on our website. directors-dealings
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The Executive Board and Supervisory Board of adidas AG issued their last Declaration of Compliance pursuant to
§ 161 AktG on February 12, 2015 and made an intra-year change on November 4, 2015. For the period from the publication of the last
complete Declaration of Compliance up to June 12, 2015, the following Declaration refers to the German Corporate Governance Code
(hereinafter referred to as the “Code”) as amended on June 24, 2014. For the period as of June 13, 2015, the following Declaration
refers to the recommendations of the Code as amended on May 5, 2015, which was published in the Federal Gazette on June 12, 2015.
The Executive Board and Supervisory Board of adidas AG declare that the recommendations of the ‘Government Commission on the
German Corporate Governance Code’ have been and are met with the following deviations:
Capping overall compensation and variable compensation components (section 4.2.3 subsection 2 sentence 6)
Since the issuance of the last Declaration of Compliance, we have followed the recommendations of the Code for one Executive Board
service contract that has been newly concluded and for one Executive Board service contract that has been extended with effect from
January 1, 2016. Thus, all Executive Board service contracts are now compliant with the recommendations of the Code.
Agreeing severance payment caps when concluding Executive Board service contracts (section 4.2.3 subsection 4)
Since the issuance of the last Declaration of Compliance, a severance payment cap in accordance with the recommendations of the
Code was agreed for one Executive Board service contract that has been newly concluded and for one Executive Board service contract
that has been extended with effect from January 1, 2016. Thus, all Executive Board service contracts are now compliant with the
recommendations of the Code.
Specification of a regular limit of length of membership for Supervisory Board members (section 5.4.1 subsection 2 sentence 1)
In accordance with section 5.4.1 subsection 2 sentence 1 of the Code, the Supervisory Board has specified concrete objectives for its
composition. However, it has not specified a regular limit of length of membership for Supervisory Board members. The Supervisory
Board is of the opinion that a general limit would not take into consideration specific factors which might justify an extended length
of membership of individual Supervisory Board members in the interest of the company and from the point of view of those entitled
to elect members to the Supervisory Board.
The aforementioned Declaration of Compliance dated February 15, 2016 has been published under and can be downloaded
at WWW. AD I DAS- G RO UP.CO M /S/CO R P O R AT E - G OVE R N AN C E .
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They are actively lived by our Executive Board members, Supervisory Board members and our employees
and have been incorporated into our Code of Conduct which we completely revised in 2014. Our business
activities are oriented towards the legal systems in the various countries and markets in which we operate.
This implies a high level of social and environmental responsibility.
Compliance with working and social standards: The development of company guidelines with regard to www.adidas-group.com/s/
social minimum standards, work safety as well as health and environmental protection and the monitoring standards-and-policies
thereof at the production facilities of the adidas Group and its business partners is an integral component
of our corporate policy. Our Group has a separate Code of Conduct for the supply chain, the so-called
‘Workplace Standards’. We report on our sustainability programme in this Annual Report, publish a detailed see Sustainability, p. 94
sustainability report annually and provide information on our progress throughout the year on our website.
Environmental responsibility: For long-term, successful management of the adidas Group, sustainable
actions that embrace, in particular, social and environmental responsibility towards present and future
generations are essential. Our Social & Environmental Affairs department, with its worldwide team, has
for many years been responsible for monitoring the rights of employees in the supply chain as well as for
product safety management and the coordination of the environmental strategy.
In our chemical management, we have been running leadership programmes that address this topic within see Sustainability, p. 94
our area of direct influence for years now. Further, we have set clear targets on emission reduction and we
proactively address the impacts of climate change through a number of initiatives in our own operations, in
our supply chain and through various partnerships. At the invitation of the UN Climate Change Secretariat,
the Group joined the ‘UN Climate Neutral Now’ initiative. As a champion of the initiative, we have committed,
inter alia, to estimate and reduce our emissions and to offset at least part of the remaining unavoidable www.adidas-group.com/s/
emissions with UN-certified offsets. climate-change
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Social commitment: The adidas Group cooperates with charity organisations in order to improve the quality
of life for people by means of sport. Moreover, we support international humanitarian aid efforts, e.g. in
the wake of natural disasters, and we are committed through various projects worldwide to education,
science and humanitarian initiatives. Our employees also have a wide range of possibilities to participate in
social programmes. Through the adidas Fund, for example, they can become involved in charitable causes www.adidas-group.com/s/
around the world. Our website provides information on the various projects. employee-volunteering
In 2015, we focused in particular on refugee aid, through the extensive donation of money and products to
refugee camps and through aid and integration programmes at our own locations. Following our ‘three-
pillar model’, we are committed to humanitarian aid, we collaborate closely with public authorities and
external partners as well as volunteers, and we also develop possibilities for work integration. Overall,
we contributed an amount exceeding half a million euros for refugee aid from various activities in 2015.
More information on topics covered in this report can be found on our website at W W W. AD I DAS- G RO UP.CO M
including:
•• Code of Conduct
•• Sustainability
•• Social commitment
•• Risk and opportunity management and compliance
•• Information and documents on the Annual General Meeting
•• Directors’ dealings
•• Accounting and annual audit
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Corporate Governance Report including the Declaration on Corporate Governance
In addition, we also provide all documents and information on our Annual General Meeting on our website.
The shareholders of adidas AG exercise their shareholders’ rights at the Annual General Meeting. Each
share grants one vote. Our shareholders are involved in all fundamental decisions at the Annual General
Meeting through their participation rights. It is our intention to support our shareholders in exercising their
voting rights at the Annual General Meeting.
Therefore, at our next Annual General Meeting, taking place on May 12, 2016 in Fuerth (Bavaria), we will
again provide our shareholders with the best possible service. Shareholders have the possibility, inter alia,
to electronically register for the Annual General Meeting through our shareholder portal or to participate
in voting by granting powers of representation and voting instructions online to the proxies appointed by
the company. Further, all shareholders can follow the Annual General Meeting in full length live on the
company’s website.
KPMG AG Wirtschaftsprüfungsgesellschaft was appointed as auditor for the 2015 annual financial
statements and annual consolidated financial statements by the Annual General Meeting. The Supervisory
Board had previously assured itself of the auditor’s independence.
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COMPENSATION REPORT 1
The Compensation Report outlines the principles of the compensation system and the level of
Executive Board and Supervisory Board compensation in accordance with the legal requirements
and the recommendations of the German Corporate Governance Code (the ‘Code’) as amended on
May 5, 2015. For the adidas Group, transparent and comprehensible reporting on the compensation
of the Executive Board and Supervisory Board is an essential element of good corporate governance.
The compensation system is geared towards creating an incentive for successful, sustainably value-oriented
corporate development and management. In determining the Executive Board members’ compensation
particularly in terms of its appropriateness, such factors as the size and global orientation, the economic
situation, the success and outlook of the company are taken into consideration, as well as the common level
of the compensation in comparison with peer companies and with the compensation structure applicable for
other areas of the company. To this end, the relation between the Executive Board compensation and that
of senior management and employees overall is taken into account, also in terms of its development over
time. In addition, the tasks and contribution of each Executive Board member to the company’s success,
their individual performance as well as the overall performance of the Executive Board are considered when
determining the compensation of the Executive Board. It aims to appropriately remunerate exceptional
performance, while diminishing variable compensation when targets are not met. Thus, in the Supervisory
Board’s opinion, an appropriate level of compensation can be ensured.
The compensation system for the members of the Executive Board which has been applicable since the
2015 financial year was adopted by a clear majority at the Annual General Meeting on May 7, 2015.
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The variable compensation components are designed in such a way that the incentive to achieve the decisive
long-term targets set by the LTIP is significantly higher than the incentive to achieve the targets decisive for
being granted the Performance Bonus. Corresponding contractual regulations ensure that this weighting
will also be maintained in the future. More than 50% of the variable target compensation component is
based upon multi-year performance criteria.
As criteria for the 2015 Performance Bonus the Supervisory Board established the following business-
related criteria (performance criteria):
•• increase in net income from continuing operations,
•• increase in net contribution at TaylorMade-adidas Golf (global),
•• increase in net sales of the adidas brand in the USA (currency-neutral),
•• increase in market share of football boots in Western Europe,
•• increase in volume in the area of Boost Running (global).
In calculating the amount of the Performance Bonus, the degree of target achievement determined for
each individual performance criterion is weighted according to the percentage value of the respective
performance criterion. The sum of the weighted degrees of target achievement of the performance criteria is
then multiplied by the individual Bonus target amount for each Executive Board member. The Performance
Bonus to be granted to the individual Executive Board members is capped at a maximum of 150% of the
individual Bonus target amount. If an Executive Board member takes or leaves office during a financial year,
the Performance Bonus is calculated on a pro rata basis after the end of the financial year. In certain cases
defined in the Terms & Conditions of the Performance Bonus, entitlement to the payout of a Performance
Bonus is generally forfeited, unless the Supervisory Board determines otherwise at its equitable discretion.
•• The LTIP Bonus serves – in line with sustainability-oriented corporate planning – as compensation for
the long-term performance of the Executive Board based on the Long-Term Incentive Plan 2015/2017
(LTIP 2015/2017) measured over a three-year period. It is determined by the Supervisory Board in a
two-stage process:
•• In determining the LTIP 2015/2017 at the beginning of the 2015 financial year, the Supervisory Board
defined the performance criteria, linked to clear targets and oriented towards the sustainable growth
of the company, and also defined the individual amount of the LTIP Bonus target amount for each
Executive Board member, based on a target achievement of 100% (LTIP target amount).
•• At the end of the 2017 financial year, the Supervisory Board will examine the precise target
achievement of each Executive Board member and determine the amount of LTIP Bonus to be paid,
depending on the degree of actual target achievement. Payout will be effected after the 2017 consoli-
dated financial statements are approved.
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Compensation Report
For the LTIP 2015/2017, the Supervisory Board determined the following performance criteria for the
three-year period:
•• achievement of a defined net income from continuing operations,
•• increase in the US market share measured/assessed by the increase in market shares of adidas
footwear and an improvement of the brand’s popularity,
•• increase in the adidas AG share price over three years and relative outperformance of the adidas AG
share compared to the DAX-30 price index,
•• increase in profitability of the retail segment,
•• improvement of sustainability measured/assessed by the improvement of employee satisfaction and
an increase in the percentage of female representation in management positions within the Group.
In calculating the amount of the LTIP Bonus, the degree of target achievement determined for each
individual performance criterion is weighted according to the percentage value of the respective
performance criterion. The development of the individual performance criteria over the three-year
period from 2015 to 2017 is decisive for the assessment of target achievement. The sum of the weighted
degrees of target achievement of the performance criteria is multiplied by the individual LTIP target
amount for each Executive Board member.
For the ultimate evaluation of the Executive Board’s performance, qualitative criteria determined by the
Supervisory Board when establishing the LTIP 2015/2017, such as the further development of company
health management as well as occupational health and safety, are also taken into account. The LTIP
Bonus is capped at a maximum of 150% of the individual LTIP target amount. If the overall degree of
target achievement lies at or below 50%, the Executive Board member is not entitled to the LTIP Bonus.
If an Executive Board member takes or leaves office during the term of the LTIP 2015/2017 (Performance
Period), the LTIP Bonus is generally calculated on a pro rata basis. In certain cases defined in the Terms
& Conditions of the LTIP 2015/2017, entitlement to the payout of an LTIP Bonus is generally forfeited,
unless the Supervisory Board determines otherwise at its equitable discretion.
PENSION COMMITMENTS
All active members of the Executive Board have individual contractual defined benefit pension plans which
are calculated based on the length of appointment to the Executive Board as a percentage of contractually
agreed pensionable income.
Executive Board members who have been appointed since October 1, 2013, or will be appointed in the
future will be granted defined contribution pension plans with effect from January 1, 2015. The defined
benefit pension plans granted to Roland Auschel and Eric Liedtke as of their appointments were converted
to defined contribution pension plans with effect from January 1, 2015.
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The Supervisory Board has, as its targeted level of provision regarding pension commitments for members
of the Executive Board, determined a pension entitlement amounting to a maximum of 40% 5 of an Executive
Board member’s pensionable income. Following the Executive Board member’s departure from the
company, benefit payments are made on a monthly basis
•• as a retirement pension upon reaching the age of 65; or
•• as a disability pension in the event of occupational or general disability for medical reasons, for no
longer than up to the point a retirement pension is paid, amounting to the pension entitlement reached
at the point the respective pension became payable;
•• as survivors’ benefits upon the death of an Executive Board member, providing the spouse or partner
with 50% of the pension entitlements up to this point and, if applicable, 15% of the pension entitlements
up to this point for each dependent half-orphan or 30% for each dependent orphan. Taken together,
survivors’ benefits may not exceed the deceased Executive Board member’s total pension entitlement.
If survivors’ entitlements exceed the pension entitlement, benefits for dependent children are reduced
proportionately.
In the event that an Executive Board member leaves the company prior to reaching retirement age, the
non-forfeiture of the pension entitlement will be in line with legal provisions. The pension entitlement is
not, as legally envisaged, reduced pro rata temporis, i.e. it amounts to at least the base amount of the
pension commitment made to the Executive Board member, plus the pension modules accumulated
annually during the term of office.
Following commencement of the pension-triggering event, ongoing pensions are adjusted in line with the
development of state pensions.
An amount (currently) equalling 50% of the individual annual fixed salary is credited by the company to
the virtual pension account of the individual Executive Board member each year. The pension assets yield
a fixed interest of 3% p.a., however for no longer than until the pension benefits initially become due.
Entitlement to the pension benefits becomes vested immediately. The pension benefits comprise pensions
to be received upon reaching the age of 65, or, on application, early retirement pensions to be received
upon reaching the age of 62, as well as invalidity and survivors’ benefits.
On occurrence of the pension-triggering event, the pension benefits generally correspond to the balance 3 Deviating provision for Glenn
Bennett: Instead of his initial
of the pension account including accumulated interest on that date. In case of invalidity or death prior to appointment date (effective
March 6, 1997), January 1, 2000
reaching the age of 62, for the minimum coverage, the Executive Board member’s pension account will be is used for the calculation of his
pension entitlements with a base
credited with the outstanding pension benefits for the time until the Executive Board member would have amount of 20% of pensionable
income; initial appointment of
reached the age of 62, but no longer than for 120 months (without interest accrual). The pension benefits Herbert Hainer: effective March 6,
due upon death of the Executive Board member are payable to the widow, the widower or the registered 1997; initial appointment of Robin
J. Stalker: effective January 30,
civil partner and the orphans as joint creditors. 2001; initial appointment of Roland
Auschel: effective October 1, 2013;
initial appointment of Eric Liedtke:
effective March 6, 2014.
4 Increase of the annual pension
components of Glenn Bennett
and Robin J. Stalker to three
percentage points of the
pensionable income effective
March 6, 2015.
5 Increase of the targeted provision
level of Glenn Bennett and Robin
J. Stalker to a pension entitlement
of a maximum of 50% of the
individual pensionable income
effective March 6, 2015.
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Compensation Report
At the Executive Board member’s choice, the payout of all pension benefits is made either as a one-time
payment or in up to ten equal annual instalments. If no choice is made by the Executive Board member,
the pension benefits are paid out in three equal annual instalments.
In case of a payout in three or ten annual instalments, the still outstanding instalments of the benefit
phase bear the maximum interest rate of the first due date of the pension benefits for the calculation of
the actuarial reserve according to the German Actuarial Reserve Ordinance (DeckRV) for life insurance
companies.
As part of the conversion of the defined benefit pension plans of Roland Auschel and Eric Liedtke to defined
contribution pension plans, the benefit entitlements earned up until the conversion date (December 31, 2014)
were credited to the new defined contribution pension plans as a starting balance.
Insolvency insurance for the pension commitments granted to the Executive Board members as of
October 1, 2013 is ensured by the integration of the pension plans in the existing trust model, the Contractual
Trust Arrangement (CTA).
Herbert Hainer, Roland Auschel, Eric Liedtke and Robin J. Stalker, who belonged to the group of senior
executives of adidas AG prior to their Executive Board appointments, will at the time of their retirement
receive additional payments from the ‘adidas Management Pension Plan’. Until their appointment as
Executive Board members, adidas AG had contributed pension components for Herbert Hainer, Roland
Auschel, Eric Liedtke and Robin J. Stalker under these supplementary provisions which were introduced
for all senior executives of the company in 1989.
If an Executive Board member dies during his term of office, his spouse or partner receives or, alternatively,
any dependent children receive, in addition to pension benefits, the pro rata annual fixed salary for the month
of death and the following three months, but no longer than until the agreed end date of the service contract.
Executive Board members incumbent as at December 31, 2015 FY 2014 FY 2015 FY 2014 FY 2015
1 Based on the amendment of the Pension Agreement effective March 6, 2015, the service cost in the 2014 financial year comprised the 2014 service cost and the 2014 past service cost.
In case of premature termination of tenure in the absence of good cause, the Executive Board service
contracts cap potential compensatory payments at a maximum of twice the overall annual compensation,
not exceeding payment claims for the remaining period of the service contract (Severance Payment
Cap) 6. In this context, the overall annual compensation means the Executive Board member’s overall
compensation paid for the last full financial year prior to departure from the Executive Board. In calculating 6 Agreement on a Severance
Payment Cap in Roland Auschel’s
the overall compensation, a multi-year compensation component and the service costs will only be taken Executive Board service contract
only effective as of January 1,
into consideration with the proportion attributable to the last full financial year prior to departure. When 2016.
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determining the overall compensation, a possible follow-up bonus 7 is not included, but the expected overall
compensation for the current financial year is considered, taking into account the outlined provisions.
If the service contract is terminated due to a change of control, a possible severance payment is limited
to 150% of the Severance Payment Cap.
The recommendation of the Code to individually disclose the compensation components for each Executive
Board member and to use the sample tables attached to the Code is implemented in the following.
In accordance with the requirements of the Code, the Performance Bonus is disclosed with the amount
granted in case of 100% target achievement. Pursuant to the recommendations of the Code, the LTIP
Bonus resulting from the LTIP 2012/2014 and LTIP 2015/2017, each measured over a three-year period,
is indicated with the pro rata temporis target amount of an ‘average probability scenario’ at the time of
granting, whereby adidas AG takes the 100% target amount as the basis.
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02 BENEFITS GRANTED IN €
2014 2015 2015 (min.) 2015 (max.) 2014 2015 2015 (min.) 2015 (max.)
Fixed compensation 1,500,000 1,582,258 1,582,258 1,582,258 550,000 550,000 550,000 550,000
Other benefits 28,304 28,199 28,199 28,199 16,237 17,742 17,742 17,742
Total 1,528,304 1,610,457 1,610,457 1,610,457 566,237 567,742 567,742 567,742
One-year variable compensation 3 1,273,080 1,311,270 0 1,966,905 400,000 412,000 0 618,000
Multi-year variable compensation 1,540,000 1,694,000 0 2,541,000 550,000 616,667 0 925,000
LTIP 2012/2014 4 1,540,000 n.a. n.a. n.a. 550,000 n.a. n.a. n.a.
LTIP 2015/2017 n.a. 1,694,000 0 2,541,000 n.a. 616,667 0 925,000
Total 4,341,384 4,615,727 1,610,457 6,118,362 1,516,237 1,596,408 567,742 2,110,742
Service cost 5, 6 330,836 428,648 428,648 428,648 390,536 361,000 361,000 361,000
Overall compensation 4,672,220 5,044,375 2,039,105 6,547,010 1,906,773 1,957,408 928,742 2,471,742
2014 1 2015 2 2015 (min.) 2015 (max.) 2014 2015 2015 (min.) 2015 (max.)
Fixed compensation 546,029 680,560 680,560 680,560 409,946 516,667 516,667 516,667
Other benefits 19,730 30,993 30,993 30,993 10,213 15,656 15,656 15,656
Total 565,759 711,553 711,553 711,553 420,159 532,322 532,322 532,322
One-year variable compensation 3 370,292 662,132 0 993,199 333,333 412,000 0 618,000
Multi-year variable compensation 839,726 901,101 0 1,351,651 437,500 616,667 0 925,000
LTIP 2012/2014 4 839,726 n.a. n.a. n.a. 437,500 n.a. n.a. n.a.
LTIP 2015/2017 n.a. 901,101 0 1,351,651 n.a. 616,667 0 925,000
Total 1,775,777 2,274,786 711,553 3,056,402 1,190,992 1,560,989 532,322 2,075,322
Service cost 5, 6 756,632 251,162 251,162 251,162 315,951 336,000 336,000 336,000
Overall compensation 2,532,409 2,525,948 962,715 3,307,564 1,506,943 1,896,989 868,322 2,411,322
2014 2015 2015 (min.) 2015 (max.) 2014 2015 2015 (min.) 2015 (max.)
Fixed compensation 605,000 654,603 654,603 654,603 192,500 n.a. n.a. n.a.
Other benefits 18,617 19,817 19,817 19,817 8,382 n.a. n.a. n.a.
Total 623,617 674,421 674,421 674,421 200,882 n.a. n.a. n.a.
One-year variable compensation 3 402,730 520,000 0 780,000 0 n.a. n.a. n.a.
Multi-year variable compensation 770,000 741,800 0 1,112,700 0 n.a. n.a. n.a.
LTIP 2012/2014 4 770,000 n.a. n.a. n.a. n.a. n.a. n.a. n.a.
LTIP 2015/2017 n.a. 741,800 0 1,112,700 n.a. n.a. n.a. n.a.
Total 1,796,347 1,936,221 674,421 2,567,121 200,882 n.a. n.a. n.a.
Service cost 5, 6 907,791 379,868 379,868 379,868 751,066 n.a. n.a. n.a.
Overall compensation 2,704,138 2,316,089 1,054,289 2,946,989 951,948 n.a. n.a. n.a.
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03 ALLOCATION IN €
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There are further pension commitments towards three former Executive Board members who resigned after
December 31, 2005, which are covered by a pension fund or a pension fund in combination with a reinsured
pension trust fund. From this, indirect obligations amounting to € 12.644 million (2014: € 13.576 million)
arise for adidas AG, for which no accruals were established due to financing through the pension fund
and pension trust fund. This decrease is also attributable to an increase of the underlying interest rate.
The dynamisation of the pensions paid to former Executive Board members is effected in accordance with
statutory regulations or regulations under collective agreements, unless a surplus from the pension fund
is used for an increase in pension benefits after pension payments have already begun.
For the 2015 financial year, each individual member of the Supervisory Board received €50,000 as fixed
annual compensation; three times this amount was paid to the Chairman of the Supervisory Board and
twice this amount was paid to each Deputy Chairperson. Members of the General Committee and of the
Finance and Investment Committee received additional compensation of € 25,000 and members of the
Audit Committee received additional compensation of € 50,000. In addition to their fixed compensation, the
Chairmen of the General Committee and of the Finance and Investment Committee received a compensation
amount of € 50,000 each, and the Chairman of the Audit Committee received compensation of € 75,000.
The compensation paid for a committee chairmanship also covers the membership in such committee. The
members of the Steering Committee, the Mediation Committee, the Nomination Committee and committees
which are established ad hoc do not receive additional compensation. If a Supervisory Board member is
in more than one committee, the member only receives compensation for his/her task in the committee
with the highest compensation. The Supervisory Board members are reimbursed for all expenses incurred
in connection with their mandates as well as for the VAT payable on their compensation, insofar as they
charge for it separately.
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The total compensation paid to our Supervisory Board in the 2015 financial year amounted to € 1.15 million
(2014: € 0.92 million). In addition, attendance fees totalling € 72,750 were paid. The increase in the total
compensation for the 2015 financial year compared to the 2014 financial year is attributable to the resolution
of the Annual General Meeting on May 8, 2014, on the increase of the fixed annual compensation from
€ 40,000 to € 50,000 as well as on the introduction of an attendance fee amounting to € 750 for each meeting
requiring personal attendance with effect from the 2015 financial year.
1 First-time Supervisory Board member since the end of the Annual General Meeting held on May 8, 2014.
2 Supervisory Board member until the end of the Annual General Meeting held on May 8, 2014.
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Our Share
OUR SHARE
In 2015, international stock market performance was mixed, characterised by highly volatile
movements. While the DAX-30 increased by 10%, the MSCI World Textiles, Apparel & Luxury Goods
Index declined 3%. Following an underperformance versus the overall market in 2014, the adidas AG
share regained significant momentum in 2015. The positive share price development was supported
by the introduction of the adidas Group’s new strategic business plan ‘Creating the New’ as well
as strong operational momentum during the year. As a result, the adidas AG share reached a new
all-time high during the course of the year and ended 2015 as the top performer of the DAX-30 with an
increase of 56%. As a result of the stellar operational performance in 2015 as well as Management’s
confidence in the strength of the Group’s financial position and long-term growth aspirations, we
intend to propose a dividend per share of € 1.60 at our 2016 Annual General Meeting.
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Our Share
190
160
130
100
70
1 Index: December 31, 2010 = 100. — adidas AG — DAX-30 — MSCI World Textiles, Apparel & Luxury Goods Index
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Our Share
04 2015 ADIDAS AG HIGH AND LOW SHARE PRICES PER MONTH 1 IN €
|
Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
|
93.41
91.59
90
83.20
85.93
77.21
80
76.33
74.48
74.47
73.80
80.80
72.09
72.01
69.43
70
73.25
71.70
71.53
61.57
68.65
68.44
66.80
65.18
60
63.68
61.79
54.61
50
— 30- day moving average ■ High and low share prices Source: Bloomberg.
In addition, the financial objectives outlined during the day were positively perceived by the financial
community and were above market expectations.
At the beginning of the second quarter, the adidas AG share continued its positive trend, supported by
subsequent management roadshow activities. On May 5, the adidas Group released strong first quarter
results which were above market expectations. However, the overall negative market sentiment resulting
from ongoing concerns with regard to a Greek default weighed on both the adidas AG share and international
equity markets during the day and for the remainder of the second quarter. On June 24, the adidas Group
held its first IR Tutorial Workshop. While the event was very well received by market participants, the adidas
AG share was not able to escape the overall negative market sentiment.
At the beginning of the third quarter of 2015, extensive roadshow activities as well as positive analyst
commentary prior to the adidas Group’s first half results release provided positive stimulus to the share
price in July. While the publication of the adidas Group’s first half results was positively perceived by market
participants, the adidas AG share came under pressure from mid-August onwards, reflecting the overall
challenging market environment caused by weakening economic data from China. During the first half of
September, the adidas AG share stabilised and traded sideways, supported by positive company-specific
as well as sector-related newsflow. On November 5, following the publication of a very strong set of third
quarter results, together with increased guidance for the 2015 financial year and a better-than-expected
initial outlook for 2016, the adidas AG share rose 9% during the day. Subsequent management roadshows
and positive analyst feedback provided further momentum to the share price, resulting in a new all-time
high of € 93.41 on December 2. The remaining weeks of December were characterised by macroeconomic
uncertainties as well as profit taking by some investors. As a result, the adidas AG share closed 2015 at
€ 89.91, representing a 56% increase over the year and making the adidas AG share the top performer of
the DAX-30. This implies a market capitalisation of € 18.0 billion at the end of 2015 versus € 11.8 billion see Table 03
at the end of 2014.
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Our Share
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On March 5, 2015, adidas AG announced the commencement of the second tranche of the share buyback
programme with an aggregate acquisition cost of up to € 300 million (excluding incidental purchasing
costs). Within the second tranche up to and including June 15, 2015, adidas AG bought back 4,129,627
shares. This corresponds to a notional amount of € 4,129,627 in the nominal capital and consequently
1.97% of the company’s nominal capital. The average purchase price per share for this second tranche was
€ 72.65. The total number of shares bought back by adidas AG within the framework of the shareholder
return programme amounted to 9,018,769 shares as of December 31, 2015. This corresponds to a notional
amount of € 9,018,769 in the nominal capital and consequently 4.31% of the company’s nominal capital.
As of year-end 2015, the adidas AG had successfully completed 40% of its multi-year shareholder return
programme.
In terms of geographical distribution, the North American market currently accounts for 33% of institutional
shareholdings, followed by the UK with 26%. Identified German institutional investors hold 9% of shares
outstanding. Switzerland and France account for 6% and 5%, respectively. 21% of institutional shareholders
were identified in other regions of the world. see Diagram 06
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For the second time in three years, the adidas Group was awarded a Red Dot Communication Design Award
for its Annual Report. Out of over 7,000 submissions, the Red Dot jury chose the best entries of the year
for communication design. In addition, the adidas Group ranked second among all DAX-30 companies in
the ‘Best Annual Report’ ranking of German business magazine ‘Bilanz’, which focuses on the quality of
content and transparency in reporting amongst German corporations.
51
OUR
Group Strategy
•
•
•
•
adidas Strategy
Reebok Strategy
TaylorMade-adidas Golf Strategy
Reebok-CCM Hockey Strategy
54
61
67
69
72
Global Operations 74
Research and Development 80
Our People 87
Sustainability 94
GROUP
Group Management Report
This report contains the Group Management Report of the adidas Group,
comprising adidas AG and its consolidated subsidiaries, and the
Management Report of adidas AG.
2
Group M anagement Report – O ur G roup
Group Strategy
GROUP STRATEGY
The adidas Group strives to inspire and enable people to harness the power of sport in their lives.
Sport is our very purpose. Inspired by our heritage, we know that a profound understanding of the
consumer and their journey in sport is essential to achieving this goal. To anticipate and respond
to their needs, we continuously strive to create a culture of innovation and creativity. Through our
portfolio of authentic sports brands, we harness this culture and push the boundaries of products,
services and processes to drive brand desire. This, in turn, will drive value creation for our company
and our shareholders.
We fill our purpose with life through the following strategic pillars reflecting our values rooted in sport:
•• Portfolio of authentic sports brands: Our brands are driven to create and innovate through a common
passion for sport and a sporting lifestyle. At the same time, each brand has a unique identity and focus
on its core competencies. This approach allows us to develop and create products, experiences and
services tailored to the individual needs and desires of a broad spectrum of consumers, increasing our
leverage in the marketplace.
•• Developing a team grounded in our heritage in sport: Our culture is continuously shaped by influences
from the past and the present as well as our future aspirations. We foster a corporate culture of perfor-
mance, passion, integrity and diversity by creating a work environment that stimulates innovation, team see Our People, p. 87
spirit and achievement based on strong leadership and employee engagement.
•• Investments focused on highest-potential markets and channels: As a Group, we target strong market
positions in all markets in which we compete. However, we have prioritised our investments based on
those markets which offer the best medium- to long-term growth and profitability opportunities. In
this respect, we place considerable emphasis on expanding our activities in the emerging markets,
particularly in Greater China and Latin America, as well as building our market share in the USA and
Western Europe.
•• Creating a flexible supply chain: Speed and agility are key to outpacing the competition, providing a
constant flow of new and relevant products for our consumers and high service levels for our customers.
We are committed to meeting the full range of consumer needs by providing game-changing technical
innovations for sport, creating and driving trends in streetwear through our sports-inspired lifestyle
products, while ensuring constant product availability in the correct size and colour to the highest see Global Operations, p. 74
quality standards.
•• Innovation: We will continue to challenge the boundaries of functionality, performance and design by
leveraging our extensive R&D expertise within the Group and also by defining Open Source as a key s ee Research and
strategic choice. In addition, enhancing services for customers and consumers alike as well as imple- Development, p. 80
menting improved internal processes are other areas where our organisation strives to innovate.
•• Focusing on sustainability: We are committed to further striking the balance between shareholder
interests and the needs and concerns of multiple other stakeholders, including our employees, the see Sustainability, p. 94
people making our products and the environment. On our website we provide detailed information on www.adidas-group.com
the steps we take to have a sustainable positive impact on society and the planet.
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Group Strategy
•• Creating long-term shareholder value: Creating long-term value for our shareholders through
strong and consistent operating cash flow generation drives our overall decision-making process.
Therefore, we are focused on rigorously managing those factors under our control, making strategic s ee Internal Group Management
choices that will drive sustainable revenue and earnings growth and, ultimately, operating cash flow. System, p. 102
We are committed to increasing returns to shareholders with above-industry-average share price
performance and dividends.
Against the background of these three trends, in March 2015, we presented our new strategic business
plan until the year 2020 named ‘Creating the New’.
Operating leverage
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Group Strategy
We have built the foundation for our Speed ambitions with adidas neo, in which a big proportion of the
product range to date already runs on so-called ‘Speed programmes’. In four categories – Running, Football,
Training and Originals – we have started to adapt the learnings from neo and to build Speed capabilities
for a defined share of their business.
We will use our industry-leading experience to re-shape our entire business model end-to-end, from range
planning to product creation, sourcing, supply chain, go-to-market and sales. We base our Speed ambitions
on three global and centralised initiatives that are deployed consistently across our markets and channels:
•• Planned responsiveness: Based on sell-through data, which we receive and analyse at the beginning of
the season, we re-order products and deliver them within the season to fulfil higher consumer demand
than initially forecasted.
•• Never out of stock: We standardise and strengthen our existing ‘never-out-of-stock’ business propo-
sition by setting a global, permanent offer with longer life cycles and continuous reproduction and
replenishment. This will ensure our most iconic and desired products are permanently available to
our consumers.
•• In-season creation: We plan ranges to be created later in the season in order to create or capture the
latest trends of the industry driving brand desire to new heights.
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The combination of these three initiatives will transform our current set-up to a new speed-enabled s ee Research and
end-to-end business model, with the goal of winning the consumers with constantly fresh and desirable Development, p. 80
products.
Besides focusing on Speed in our current supply chain and production process, we also look into new,
disruptive business models and technologies to make us faster. A prime example in this area is our see Global Operations, p. 74
Speedfactory project: using automated manufacturing to bring production to where the consumer is.
Our 2020 targets for Speed: Today, almost 15% of our sales are generated on Speed programmes. As of
2016, we plan to start moving that business under our new end-to-end business model. It is our ambition
to increase the share of speed-enabled products to 50% of our net sales by 2020. Our initiatives will put
us in the position to provide consumers with appealing and up-to-date products. As a consequence, our
full-price share of sales is forecasted to improve by 20 percentage points by 2020.
Cities
Major metropolitan centres are playing an increasingly influential role in shaping global trends and
consumers’ perception, perspectives and decisions across a number of topics. Given this megatrend
of urbanisation and the continued influence of cities, the adidas Group has defined Cities as one of its
strategic choices.
Creating the New will therefore focus on six global cities: London, Los Angeles, New York, Paris, Shanghai
and Tokyo. These six cities were chosen based on the size of their population, their landscape of sport, their
level of economic and commercial activity and their concentration of global media, among others. Across
the six cities, the adidas Group will disproportionately invest in marketing, retail experiences, leadership
focus and the development of local teams with the singular goal of maximising consumers’ experiences
with our brands. We will constantly evaluate our activities and, if necessary, expand our focus of Cities
beyond the initial six.
It is our goal to create an integrated brand and business ecosystem designed to touch and enable all phases
of the consumer journey. This includes:
•• Product: Leading innovation and design, executed through global product launches and campaigns.
•• Retail experiences: Holistic development of the omni-channel approach across the various consumer
touchpoints.
•• Activation: Activation of sports marketing assets and consumer communities.
We are refining our focus on consumers in key cities by engaging more deeply with them in communities
where they live, places where they work, fields, courts and streets where they play and doors where they
shop. And we further intend to create more synergies between our commercial and activation efforts and
give our consumers tangible reasons to seek our brands, while offering them premium brand experiences
in doors and destinations. This also includes aligning our initiatives with similar efforts of our key account
partners.
Our 2020 targets for Cities: In 2015, we set the foundation for this strategic choice. We focused on creating
visions and plans for each city, enabling them via new organisations and investment in systems and
processes. At the same time, we started to execute on the strategy with first results of these efforts
becoming visible across several key performance indicators. Going forward, we will continue to converge
all of our major global initiatives in our key cities, including the other strategic choices Speed and Open s ee Internal Group Management
Source. It is our goal to achieve a leading position within these cities by 2020 and we will track our impact System, p. 102
via improvement in our city-specific Net Promoter Score and market share.
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Open Source
Open Source is a new mindset with regard to collaboration, inviting athletes, consumers and partners to
become part of the adidas Group. We aim to open our doors to creative thinkers and creators, who influence
the future of sport and culture through a collaborative approach and mindset. Defining Open Source as a
strategic priority means that we intend to:
•• Provide access for externals to tools and resources we use to create (e.g. materials, factories, data,
experts, athletes, social platforms, business models).
•• Acquire creative capital, as new insights, skills, competencies and specialised knowledge sometimes
requires extensive resources to build. Collaborating allows us to get external know-how without the
expensive overhead investment.
•• Strengthen the consumer’s perception of our brands as innovative leaders in sport. We therefore intend
to give our consumers access to the progress of our projects and creation processes.
Our 2020 targets for Open Source: With Open Source, our 2020 goal is to embed external creative capital in
our processes to extend our possibilities in creating the future of sport. In the initial phase of Open Source
until 2017, we have identified two key targets. The first is to drive brand heat and advocacy by inviting
consumers to become part of our creative culture. By the end of 2017, our goal is that 30% of shared
content on our brands through social media and other channels is user-generated content. Our second
target is to grow the number of users in our digital ecosystem to over 250 million. This will ensure we are
at the pulse of the consumer journey at key moments and touchpoints in their lives. By using the insights
we will generate from these sources, we will craft better products and services for our consumers, driving
increases in Net Promoter Score and market share.
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Group Strategy
We have launched four business models which enable us to be ‘omni-present’ for the consumer, capturing
the full sales potential by minimising occasions when consumer demand is not met:
•• ‘Inventory Check’ which allows online shoppers to view in-store product availability.
•• ‘Click & Collect’ which allows consumers to reserve items for pick-up in a local store.
•• ‘Ship from Store’ which allows us to service consumers faster than before by turning our stores into
mini-distribution centres.
•• ‘Endless Aisle’ which provides in-store visitors with access to our full range of products through our
eCommerce platform.
By the end of 2016, we aim to have largely implemented these capabilities in our own-retail operations
in Western Europe, North America, Latin America and Russia/CIS. As of 2017, we will integrate selected
wholesale partners to create a truly seamless consumer experience.
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Group Strategy
We have ambitious retail expansion plans for full-price concept stores, while simultaneously reducing the
number of retail formats we operate worldwide. This will ensure consistency in the way consumers see
our brands, and will also allow us to open, close and operate stores at a lower cost. We will amplify our
success in own retail by translating key learnings to franchise stores, and expand franchising as a business
model into new geographies. eCommerce will continue to be the fastest-growing channel that we operate,
with revenues expected to increase to a level of € 2 billion by 2020. In absolute terms, however, wholesale
will remain our largest channel, driven by a keen focus on prioritised global key accounts. Strategic
partnerships will enable us to deliver a premium consumer experience in a multi-branded environment,
through the power of managed space.
Extend: In markets where we are currently the top player, we plan to leverage and extend our market
leadership. These are Russia/CIS, Japan and South Korea.
Lead: In markets where we are a strong competitor but not number one yet, we aim for market leadership.
These are Western Europe, Greater China as well as Emerging Markets.
Grow: In markets where we have identified extensive growth opportunities, we aim for dramatic market
share gains. These are: North America, Latin America and Southeast Asia/Pacific.
We see significant growth opportunities for our brands across the globe and we will win by capturing the
hearts of consumers with every interaction.
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Group Strategy – adidas Strategy
ADIDAS STRATEGY
Driven by a relentless pursuit of innovation in sports product design, development and manufacturing as
well as decades of accumulating sports science expertise, adidas is creating a unique and comprehensive
sports offering. Spanning footwear, apparel, equipment and services, adidas caters for all, from the elite
professional athletes and teams to any individual who wants to make sport part of their lives.
With this powerful platform, adidas is in a very strong position for growth.
•• Organisational structure: In 2015, the adidas brand organisation completed a major reorganisation
of roles and responsibilities under the Brand Leadership programme. The aim of this programme
is to provide an organisational structure which enables a ‘consumer-obsessed’ culture that can act
with speed, agility and empowerment. This has been achieved by adapting the ownership of decision-
making from a horizontal functional model to a vertical consumer model, where the business owner, for
example Running, now has clear decision-making authority across all functional marketing disciplines.
In addition, our Global Brands organisation has a centralised, global role for key decisions relating to
the appearance of our brands and products around the world. With this approach, we ensure that our
product offering in the markets enjoys a high level of commonality, while at the same time we ensure
that major initiatives such as product launch and communication activities are managed centrally before
they are executed locally by the markets.
•• Creator archetype: Based on the rapid evolution of sport and sports culture, with Creating the New,
adidas evolved its consumer segmentation strategy to better account for market realities. The new
consumer grid comprises six key quadrants, which are not mutually exclusive. Within this grid, the key
is to win the most influential consumers, which we call the creator archetype. The creator focus is at
the top of the grid, on male and female athletes as well as the streetwear hounds. True to the brand’s
values, these influential consumers define themselves as a work in progress – are all doers, first to
adopt, creating their own content and are focused on what’s next and what’s new. A large portion of
creators live, play and create in the world’s most influential and aspirational cities, a key reason for the
Group’s Key Cities strategic choice. In 2016, adidas will accelerate global and local marketing initia-
tives to amplify the brand’s creator positioning in the marketplace, with a specific focus on women’s.
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•• NPS introduced as key KPI: To drive its consumer-obsessed ambition in a measurable and objective
manner, for the first time in 2015, adidas included a key KPI of its brand advocacy programme, the s ee Internal Group Management
Net Promoter Score (NPS), in its employee incentive system. Investing in and rolling out a global NPS System, p. 102
ecosystem, top down and bottom up, is one of the key change pillars of Creating the New for driving
better execution at a consumer level across the brand’s touchpoints.
Footwear franchises are defined as long-term concepts that adidas commits to for a multi-year period. The
goal of franchises is not only to shape sport, but also to influence culture. They are built to create trends,
not follow. They are targeted directly at the creator through iconic features, stories and function, and have
the potential to be iterated and expanded over time. The mix of franchises is expected to be representative
of the brand’s annual category priorities, and their life cycles will be carefully managed, to ensure longevity
and make sure they are not overheated.
In addition, franchises will be prioritised throughout the value chain, highly leveraging and benefiting from
the Group’s strategic choices of Speed, Cities and Open Source. By 2017, adidas expects its top franchises
to represent at least a 30% share of the footwear business. In 2016, key adidas franchises will include a
blend of past icons such as the Stan Smith and Superstar as well as future icons such as the UltraBOOST,
PureBOOST X, Ace and NMD.
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adidas will relentlessly focus on five products: the bra, the tee, the tank, the tights and the running shoe.
These are the five products the brand will innovate against, with the aim to create the best the industry
has ever known in these five items. In addition to function, adidas will also bring style and design to the
offering through collaborations with top designers such as Stella McCartney. adidas also plans to bring
all of its women’s activities together into a women’s boutique, both digitally and physically, with the first
tests and iterations commencing in 2016.
•• Reason to believe: By harnessing the brand’s creator positioning, the emotion of sport and the power
of sport to change lives, adidas will communicate a reason to believe in the brand, letting the world
know what distinguishes adidas as a brand.
•• Reason to buy: The second priority is to harmonise and deliver globally consistent communication
around the brand’s key footwear franchises. By investing more money against fewer items, adidas will
strive to elevate its key franchises to iconic status, giving the consumer clear and compelling reasons
to buy the product.
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•• Locker room: The locker room is where loyalty is built and earned. adidas defines the locker room as
those places where athletes are fully immersed in their sport with peers and friends. It’s the football
cage, the run base or the street court. Until 2020, adidas will therefore significantly step up its grass-
roots and local activation efforts, led by initiatives in key cities.
•• Communities: Digital leadership will play a critical role in driving the Group’s 2020 strategy, and adidas
has the ambitious goal to grow its social community to over 250 million by 2017. To increase speed,
bring greater consistency and drive higher levels of brand activation online, adidas has established
eight digital newsrooms around the globe. This allows the brand to coordinate its online presence
24 hours a day as well as leverage and magnify key brand initiatives throughout the year. In addition,
adidas will also invest in app-based digital sports platforms organically and through partnering, to
further increase its community presence. The Group’s acquisition of Runtastic in 2015 brought adidas
access to over 80 million users.
In terms of partnership assets, while reducing the ratio of marketing spend and number of partnerships,
adidas will nonetheless continue to bring its products to the biggest stages in the world through:
•• Events: such as the FIFA World Cup, the UEFA EURO, the UEFA Champions League, the NHL and the
Boston Marathon.
•• High-profile teams: such as the national federations of Germany, Spain, Argentina, Russia, Mexico,
Colombia, Belgium and Japan, as well as top clubs such as Manchester United, Real Madrid, AC Milan,
FC Bayern Munich, Juventus, Flamengo and Chelsea in football, the New Zealand All Blacks and France
in rugby, and American universities such as Miami, Arizona State and UCLA.
•• High-profile individuals: such as football stars Lionel Messi, Gareth Bale, Mesut Özil and James
Rodríguez, basketball stars James Harden, Derrick Rose and Damian Lillard, marathon record holder
Dennis Kimetto, American football players Aaron Rodgers and Von Miller, and tennis stars Caroline
Wozniacki and Angelique Kerber.
In addition, adidas also has a number of strategic partnerships and collaborations with top designers and
design studios, such as with Yohji Yamamoto, Stella McCartney, Raf Simons and Rick Owens. The brand
also has similar relationships with many of the most creative personalities from across the entertainment
industry, including Kanye West, Pharrell Williams and Rita Ora.
06 ADIDAS 07 ADIDAS
SPORT 16 – ‘I’M HERE TO CREATE’ BRAND CAMPAIGN SPORT 15 – ‘CREATORS NEVER FOLLOW’ BRAND CAMPAIGN
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ROLE OF CATEGORIES
adidas has assigned each category a role and ambition until 2020, allowing the brand to exploit short- and
medium-term potential, while at the same time incubating and further developing long-term opportunities
for the brand. There are four overarching roles: Lead, Grow, Amplify and Authenticate.
Lead
•• To lead in the sporting goods industry, we believe it is a must to lead in the world’s most popular sport,
football. As such, adidas aspires to be the number one football brand in every market by 2020. This will
be driven by focusing on winning the football creator in key cities as well as increasing investment in
the brand’s football footwear franchises on and off the field of play. In 2015, adidas began a full reset
of its football footwear business with the launch of the Ace and X franchises.
•• adidas also strives for leadership in every market in Originals. Not only is adidas the original sports
brand, it also was the first brand to bring sport to the street. Brand credibility and heritage is an
important prerequisite to win the discerning streetwear hound consumer. These consumers are looking
for substance and craft and are inspired by stories and design. Growth in this category will be driven by
iconic products from the brand’s past such as the Stan Smith and Superstar as well as pioneering new
contemporary silhouettes inspired by elements from the past and the future, such as Tubular and NMD.
Grow
•• The running category is adidas’ biggest growth opportunity across all genders and price points. The
brand’s goal is to double sales in the category by 2020. Many innovations in the sports industry start
in running. With groundbreaking innovation in materials such as Boost and pioneering new manufac- s ee Research and
turing processes being driven through Speedfactory, the timing is perfect for adidas to strike in this Development, p. 80
category. To spur growth, amongst other things, adidas Running will significantly refine and evolve its
franchise strategy for the male and female athlete, increase its investment in running communities and
grassroots activations such as the Boston Runbase, as well as play a central role in driving the future
of digital in sport in cooperation with Runtastic.
•• The second category where adidas is focused on driving significant market share gains is with adidas
neo. adidas neo targets a younger, more price-conscious consumer, particularly in the emerging
markets: the young fashionable teen. To ensure success, the adidas neo formula employs a ‘fast fashion’
business model. This means quick reaction to emerging trends through shorter lead times and excel-
lence in retail execution.
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Amplify
••The training category is adidas’ largest category and is also the apparel engine of the brand. Led by
cutting-edge innovation in fabrics and materials, adidas is aiming to significantly increase its apparel
footprint under two pillars – Training, which provides products for training as a vertical sport as well
as for specific sports, and Athletics, which is geared to capturing the sports mindset of every athlete
off the pitch. As a result of the high visibility of its products in all markets, this category plays a central
role in amplifying the brand message and DNA.
Authenticate
••To be the best sports brand in the world, adidas needs to be true to sports on a local level. As such, adidas
will continue to offer a wide range of sports and sports activities such as outdoor, American football,
rugby, tennis, baseball, handball, volleyball, swimming, cycling and boxing. To maximise impact and
resources, in key markets and cities, adidas will prioritise those sports that are most significant in terms
of local culture, participation and national pride. At the same time, adidas will use online channels and
third-party distributors to ensure that consumers of any sport the brand serves can access its best-in-
class products, thus maximising growth and providing avenues for future expansion.
08 ROLE OF CATEGORIES
Focus Categories
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Group Strategy – Reebok Strategy
REEBOK STRATEGY
Reebok is focused on creating inspirational marketing capabilities that build brand equity and consumer
advocacy and can be easily leveraged to create simple and powerful brand messages. A key tenet of its
marketing and communication strategy is that movement is essential for humans to live a full life. This is
not only the brand’s guiding principle, but also the essence of Reebok’s global marketing campaign ‘Be More
Human’, launched in 2015, a new and fully integrated marketing campaign, continuing the brand’s mission
to change how people perceive and experience fitness. ‘Be More Human’ emphasises the merits of Tough
Fitness and how it benefits humans in their everyday lives, living up to their full potential as they meet and
tackle different fitness challenges. Through the campaign, Reebok celebrates everyday people who have
reconnected to a rugged physicality that allows them to live much bigger, fuller and less self-focused lives.
For these individuals, fitness isn’t just a physical activity – it’s something that enhances their entire life.
Reebok strives to lead fitness through a more social and more intense version of fitness, described as
‘Tough Fitness’. Tough Fitness is a mindset that transcends any traditional workout regimen. It is an attitude
that goes beyond the physical to incorporate social and mental well-being. The ‘Fit Generation’ is at the
epicentre of this fitness movement, and therefore Reebok’s target consumer group. These consumers,
equally men and women, live a fitness lifestyle and for them fitness is not just something they do, it is who
they are. They are young, uninhibited, optimistic, brave and tribal, and they work out several times a week,
doing a wide range of activities.
Adding to its core mission, Reebok Classics leverages the brand’s fitness heritage and celebrates how the
brand’s past shapes what it is and what it will become. Reebok Classics represents the roots of the brand
in the sports lifestyle market, with unique products that blend lifestyle and fitness and appeal to the Fit
Generation. Understanding the multi-facets of fitness, from running to yoga, Reebok applies a category-
specific approach. The key categories, addressing this diversity, are: Training, Studio (including Yoga, Dance
and other Studio activities), Combat Training, Running, Walking and Classics. For each of these categories
and including the distinct activities, Reebok provides specialised products, which allow Reebok to meet
and engage with consumers, regardless of how they choose to stay fit.
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Reebok has made women a key component of its strategy, with a fundamentally different approach to the
female consumer relative to other brands in the industry. Instead of viewing women as a separate business
and approaching women with a distinct campaign or messaging, Reebok is putting women at the heart
of everything the brand does – be it in terms of product launches, content strategy, marketing activation
or distribution.
Through a strong focus on innovation, Reebok is leading the way in new fitness movements and further
strengthening its overall fitness positioning. The innovation and R&D priorities are mainly on providing
functional products in footwear and apparel that cater to evolving and new fitness activities. Areas of focus
include specific products to meet the performance demands of Fit Generation consumers. Reebok is also
investing in material development to support body temperature control, fit and durability. This is illustrated
by recent product launches such as the Nano series of CrossFit footwear, which has become the ‘official s ee Research and
shoe of fitness’, the Cardio Ultra, designed specifically for Studio Fitness, and the All Terrain Series, the Development, p. 80
first shoe made specifically for obstacle course racing.
In 2010, Reebok entered into a long-term partnership with CrossFit, one of the fastest-growing fitness
movements in the world. Reebok is the official supplier of CrossFit footwear, apparel and accessories,
title sponsor of the CrossFit Games and has opened co-branded Reebok CrossFit boxes around the
world. While in 2010, there were approximately 2,000 CrossFit boxes globally, today there are more than
13,000 CrossFit boxes worldwide.
In 2013, Reebok forged a partnership with Spartan Race, the world’s leading obstacle race provider.
Like CrossFit, Spartan Race enables people to come together to experience fitness with a community of
like-minded individuals. Equally in 2013, Reebok announced two new partnerships to support its newly
launched Studio category. The first was Les Mills, one of the largest providers of in-gym studio programming
in the world with classes such as BodyCombat, BodyAttack, Sh’Bam, CXWorx and others. Les Mills classes
are among the most popular fitness classes in the world, with a total of 16,000 licensed studios in 80
countries around the globe offering Les Mills. In addition, Reebok started partnering with world-renowned
yoga instructor Tara Stiles. Inspired by Tara’s rebellious approach to yoga, this partnership ensures that
Reebok’s yoga collection combines expertise and insight with the brand’s rich fitness heritage.
In 2014, to support its newly launched Combat Training business, Reebok entered into a long-term
partnership with UFC, making Reebok the exclusive outfitter and apparel provider for the world’s leading
mixed martial arts organisation. The Reebok/UFC apparel line includes exclusive ‘Fight Week’ gear,
featuring the ‘Fight Kit’ for all UFC fighters and their respective teams and is being developed in conjunction
with UFC and its athletes. Additionally, Reebok is building UFC fan gear apparel and headwear, UFC training
gear, and specific products for The Ultimate Fighter TV Series.
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Group Strategy – TaylorMade-adidas Golf Strategy
TaylorMade-adidas Golf’s mission is to be the world’s leading golf company. The company’s priorities for
long-term profitable growth include:
•• A multi-brand strategy with some of golf’s most respected brands, in particular TaylorMade and
adidas Golf.
•• Focus on design and technologically advanced products.
•• Validation of products by tour professionals competing on the world’s major professional golf tours.
•• A clear focus on marketing innovation and excellence in execution.
•• Creation and execution of new retail initiatives, as well as improving global distribution.
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•• adidas Golf: A key component of adidas Golf’s strategy is creating innovative products that are targeted
to an athletic, competitive-minded golfer who is seeking a performance edge in every piece of footwear
and apparel. In 2015, adidas Golf launched the new Tour 360, incorporating the latest footwear technol-
ogies such as Boost and BOA. In addition, adidas Golf introduced the first fully asymmetrical golf shoe,
providing improved stability, grip and performance during all phases of the swing.
•• Adams: Adams’ key strategy for growth is to adapt tour-proven technology to meet the needs of golfers
seeking equipment that makes the game easier to play and thus a better experience. Adams Golf has
been positioned to drive the recreational golfer market.
•• Ashworth: Ashworth focuses on re-establishing the brand’s reputation as an authentic golf brand
dedicated to bringing modern style to the golf course.
As a consequence, TaylorMade-adidas Golf initiated a major restructuring programme in June 2015, with
the main objective to significantly improve TaylorMade-adidas Golf’s profitability, while at the same time
delivering upon its mission to be the innovative leader in golf. The restructuring programme includes a set
of main levers with first initiatives already implemented during the second half of 2015:
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Marketing activities
•• In light of Management’s efforts to shift to longer product launch cycles, TaylorMade-adidas Golf will
further reduce the number of new product introductions, thus limiting the overall marketing activities.
•• Furthermore, TaylorMade-adidas Golf will re-prioritise its global marketing spend by significantly
reducing investments in non-priority markets.
In addition to the restructuring programme, the adidas Group has engaged with an investment bank for
the purpose of analysing future options for the company’s golf business, in particular the Adams and
Ashworth brands. This strategic review of the company’s golf business is expected to be concluded by the
end of the first quarter of 2016.
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Group Strategy – Reebok-CCM Hockey Strategy
Reebok-CCM Hockey is a leading designer and marketer of ice hockey equipment and related apparel.
It equips more professional NHL hockey players than any other company and is also the official outfitter
of high-profile leagues such as the NHL. Reebok-CCM Hockey’s strategy is to increase market share by
leveraging its performance positioning and dedication to innovate for the leading athletes in the sport.
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Skates: The focus in the skates category is to drive market share increases through products addressing
critical performance aspects such as fit, weight and durability. In 2015, CCM launched the new Ribcor 50K
skate, currently being worn by Sidney Crosby as well as many other pro players. Further, 2015 saw the
launch of the new CCM JetSpeed skate with a redesigned fit, featuring RocketFrame technology which
offers a closer fit and tighter heel lock to help generate maximum speed on the ice.
Sticks: To drive future growth in the sticks category, Reebok-CCM Hockey focuses on developing new
technologies that incorporate enhanced power, feel, flexibility and weight. In 2015, CCM launched three
sticks in the second half of the year, all focused on innovation and technology to help players achieve their
best performance on the ice: the Ultra Tacks stick, the RBZ Speedburner – developed in collaboration with
TaylorMade – and the CCM Ribcor Reckoner stick.
Goalie: In 2015, Reebok Hockey transitioned its Premier goal line over to CCM. With the introduction of the
CCM Premier line, CCM further strengthened its positioning in the goalie sector. The brand now offers two
unique goalie lines for two distinct types of goaltenders, the CCM EFlex series and the CCM Premier series.
Protective: In 2015, CCM launched the new Ultra Tacks protective line, which features the addition of D3O
smart foam in certain areas to help offer more comprehensive protection.
Licensed apparel: Reebok-CCM Hockey strives to further leverage its league partnerships and exclusive
uniform status to drive growth. In addition to official uniforms, Reebok-CCM Hockey will take advantage
of its status as the official NHL locker room performance apparel supplier and its exclusive rights related
to the NHL Players’ Association (NHLPA) for name and numbered apparel and headwear.
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Global Operations
GLOBAL OPERATIONS
Global Operations manages the development, production planning, sourcing and distribution of the
majority of our products. The function strives to increase efficiency throughout the Group’s supply
chain and ensures the highest standards in product quality, availability and delivery for our customers
as well as our own-retail and eCommerce activities at competitive costs. Additionally included under
the banner of Global Operations, Global IT manages all digital platforms for the adidas Group’s
business solutions. It enhances the core systems to be future-proof, builds an open digital platform
to connect to consumers and internal employees, and drives continuous change and innovation.
Global Operations delivers upon its mission to create the best product, provide the best service and enable
the best experience for our consumers.
•• Creating the best product by focusing on innovative materials and construction capabilities as well as
new ways of manufacturing.
•• Providing the best service by enabling product availability as the consumer chooses through the Group’s
omni-channel approach to supply chain agility.
•• Enabling the best experience by creating tools that engage consumers through interactive mobile
platforms, in-store technology and the ability to co-create.
Within the adidas Group’s new strategic business plan ‘Creating the New’, Global Operations focuses on
delivering against three strategic priorities driven by several initiatives:
•• Become the first fast sports company.
•• Create a seamless consumer experience.
•• Transform the way we create and manufacture.
By delivering on these priorities, Global Operations leverages efficiencies across infrastructure and
processes to ensure that the Group’s digital ecosystem and supply chain remain a competitive advantage
in making us the partner of choice for our consumers and customers. This continues to be underlined by
our strong ‘On-Time In-Full’ (OTIF) metric, a non-financial KPI for our Group, measuring the adidas Group’s
delivery performance towards our customers and our own-retail stores. In 2015, the adidas Group delivered
81% of its adidas and Reebok products ‘on time’ and ‘in full’ (2014: 81%). For 2016, Global Operations strives
to maintain OTIF at a very strong level of around 80%. OTIF was measured for around 65% of net sales of
all adidas and Reebok products in 2015. It is also planned to further roll out OTIF to those markets that s ee Internal Group Management
are currently not in scope, thereby increasing the overall share of adidas and Reebok products measured System, p. 102
against ‘on time’ and ‘in full’.
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Global Operations is scaling the fast replenishment capabilities of best-selling seasonal articles, creating
more articles within season based on sales data and ensuring constant availability of long life cycle
products. To adjust product supply flows to the changing demands of markets, the function is building
a more integrated and agile planning environment with flexibility for deploying products to markets. In
2015, Global Operations continued to expand its efforts to ‘enable later ordering’ and further reduced
production lead times. The function succeeded in providing 60-day production lead times on 76% of apparel
volumes in the spring/summer ‘16 season. The majority of footwear volumes are already on 60 days or
less production lead times.
The Group is leveraging its strengths in sourcing and partnering with industrial and academic experts
to develop fully automated manufacturing solutions that can react quickly to consumer trends. In this
context, Speedfactory is one way we are moving production closer to key markets while developing
high-quality performance products faster than ever before. Powered by intelligent robotic, process and
material technologies, Speedfactory allows us to personalise products, supporting the growing demands
for individualisation, in a socially and environmentally responsible way. As well as providing fast reaction s ee Research and
times to consumer needs, we envision a Speedfactory network which will enhance the consumer experience, Development, p. 80
enabling them to co-create in an interactive production process.
Global Operations
Global IT
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By creating higher commonality across the Group’s various channels, Global Operations ensures higher
flexibility at each consumer touchpoint. This, in turn, enables a broader range of products to be available
at the point of sale, including online orders able to be picked up in our own-retail stores or shipped from a
store and own-retail stores able to sell inventory available in other own-retail stores. Through the inclusion
of the Group’s IT organisation, Global Operations is prioritising being ‘insights driven’. Data generated during
product creation, marketing processes and at consumer interactions is being linked to create actionable
insights which the Group makes use of to react more quickly to changing consumer needs.
In 2015, Global Operations focused on further optimising processes in distribution centres. In this regard,
the new distribution centre in Tianjin, China, which officially opened in 2015, was a particular achievement.
Also, 2015 saw the go-live of a new distribution centre in Brantford, Canada. The Russian distribution centre
in Chekhov sustained operations while increasing its speed of service with 180 own-retail stores benefiting
from next-day product replenishment.
Global Operations is developing further IT capabilities to build platforms that support key initiatives which
drive brand desire such as personalised footwear tools. With the close collaboration of Global IT and the
Group brands, efforts are focused on delivering fresh and exciting consumer services with a ‘mobile first’
approach, allowing consumers to connect to the brand at every touchpoint – from own-retail stores to
e-commerce to social networks.
Through ‘Digital Creation’, Global Operations, in cooperation with Design and IT, has already improved the
creation process from idea to market. With 3D software tools, we look at product the way the consumer
sees it and enable product iterations earlier and more rapidly without increasing the need for physical
samples. In 2015, all business units adopted these tools as the programme expanded across footwear and
apparel. In the context of 3D printing, Global Operations is supporting a cross-functional initiative called s ee Research and
Futurecraft, which places open-source collaboration and craftsmanship at the heart of design to drive Development, p. 80
innovation across all areas of production.
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Transitioning to a set pre-season selection of standard product features and driving consistent executions
across categories for core products has been underway for several seasons in apparel. In 2015, Global
Operations fully embedded the modular approach as a ‘way of working’ that maintains a consistent brand
footprint, captures cost savings in factory efficiencies and expands product modules on faster production
lead times. The methodology and approach is planned to be expanded to footwear. It will be utilised for
in-season creation styles and will see the incorporation of digital tools that increase the connection to
direct factory production.
Furthermore, the Group is investing in the next generation of materials by focusing on knitted footwear and
direct-to-textile digital printing. In addition, we are developing footwear manufacturing process innovations.
Working cross-functionally, the Group intends to reduce dependency on manual labour and to deliver
compelling product concepts with integration into key footwear and apparel franchises.
Global Operations manages product development, sourcing and distribution for adidas and Reebok as well
as for adidas Golf and Ashworth. Due to the specific sourcing requirements in their respective fields of
business, TaylorMade, Reebok-CCM Hockey, Adams Golf and the Sports Licensed Division are not serviced
through Global Operations, but instead utilise their own purchasing organisations. In order to quickly seize
short-term opportunities in their local market or react to trade regulations, Group subsidiaries may also
source from selected local suppliers outside the realm of Global Operations. Local purchases, however,
account only for a minor portion of the Group’s total sourcing volume.
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In addition, Reebok-CCM Hockey sourced around 3 million units of apparel in 2015. The majority of this
volume was also produced in Asia, while small portions were sourced from the Americas (particularly
Canada) and Europe.
02 SUPPLIERS BY REGION 1
9
12 79% Asia
12% Europe
9% Americas
79
1 Figures include adidas, Reebok, adidas Golf and Ashworth, but exclude local sourcing
partners, sourcing agents, subcontractors, second-tier suppliers and licensee factories.
2015 301
2014 258
3 1 2013 256
96% Asia
2012 240
3% Americas
2011 239
1% Europe
96
1 Figures include adidas, Reebok and adidas Golf.
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The Sports Licensed Division sourced approximately 24 million units of apparel and 11 million units of
headwear (2014: 20 million and 12 million, respectively). The majority of purchased apparel products were
sourced as unfinished goods from Latin America (79%) and Asia (21%) (2014: 71% and 29%, respectively),
and were subsequently finished in our own facilities in the USA. The vast majority of headwear sourced
was finished products manufactured in Asia (more than 99%).
TaylorMade sourced more than 99% of their hardware volumes from Asia (2014: 99%). The vast majority of
golf club components were manufactured by suppliers in Asia (China, Vietnam and Taiwan) and assembled
in Asia, the USA and Europe.
Reebok-CCM Hockey sourced 88% of their hardware volumes from Asia (2014: 87%). In addition,
Reebok-CCM Hockey sourced a portion of hardware products in the Americas.
2015 364
2014 309
331 93% Asia 2013 292
3% Europe 2012 262
3% Americas 2011 267
1% Africa
93
1 Figures include adidas, Reebok, adidas Golf and Ashworth.
2 2011 – 2013 restated due to a reclassification of certain apparel accessories from
apparel to hardware.
2015 113
2014 99
3 2013 94
20 76% Asia
2012 93
20% Europe
2011 96
3% Americas
76
1 Figures include adidas, Reebok, adidas Golf and Ashworth.
2 2011 – 2013 restated due to a reclassification of certain apparel accessories from
apparel to hardware.
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Research and Development
RESEARCH AND
DEVELOPMENT
Creating innovative products to meet the needs of professional and everyday athletes and consumers
is a prerequisite to strengthening our market position in the sporting goods industry and a premise
to being the best sporting goods company in the world. In a rapidly changing world, our culture and
passion for innovation and consistent investment in research and development (R&D) is essential to
the development of new product concepts, processes, production methods and digital applications
that are beneficial to our business objectives and our long-term sustainability ambitions. True to
the vision of creative collaboration, our R&D approach is also based on an Open Source perspective,
clearly visible in our numerous collaborations with athletes and consumers, universities, industry-
leading companies as well as national and international governments.
For the adidas brand, R&D is closely integrated with the sourcing, design and product marketing functions.
At the beginning of the product creation process, marketing defines a development priority, which, in
recent years, has increasingly included sustainability targets. This is derived on a case-by-case basis
from a combination of consumer research and feedback, competition analysis and own product testing.
Based on this, employees in our so-called FUTURE teams analyse new materials, production processes and
scientific research to increase the exchange and scope of idea generation. Their scope also extends to areas
such as consumer insights and social media. This helps promote a holistic and innovation-focused culture
which gives deeper consumer insights, while also fuelling creativity and synergies across the organisation.
To identify innovative materials as well as integrate sustainability, cost and production process aspects
into the development phase, the FUTURE teams are in close contact with our sourcing and material teams
within product development who, in turn, work closely with our suppliers.
In addition to its internal R&D efforts, the adidas Group engages in long-term and exclusive partnerships
with well-established third parties. True to the vision of creative collaboration, our R&D activities are based
on an Open Source approach, unveiled in our numerous collaborations with athletes, universities, industry- see Group Strategy, p. 54
leading companies and national and international governments. We are the first sports brand that invites
athletes, consumers, partners and customers to be part of our brands and we are already working with
some of the world’s most creative and innovative people and organisations.
Once conceptualised, new product technologies are engineered using state-of-the-art systems. Extensive
virtual prototype testing and engineering loops are carried out on every technology. Once a new product
technology is deemed viable, it is produced as a physical sample. These samples are then comprehensively
tested by a broad range of users, including top athletes. Only when these comprehensive tests have been
successful are the technologies handed over to product marketing, which commercialises the technology
to a final product.
To capitalise on our R&D achievements, we enforce the Group’s trademarks and patents by monitoring s ee Risk and Opportunity
the marketplace for infringements and taking action to prevent them. Likewise, we have comprehensive Report, p. 156
processes, and undertake significant research, to avoid infringement of third-party intellectual property
rights. As we use a wide range of different technologies in our products, we are not dependent upon any
single technology, or any patent rights related to any single technology.
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Within the framework of our new strategic business plan ‘Creating the New’ we identified five strategic
pillars within our R&D principles, which enable us to develop the best product for our athletes, while at
the same time drive game-changing innovations in the field of manufacturing, digital and sustainability.
Consequently, our ambition to be the best sporting goods company in the world will evolve around our
five pillars of innovation in close cooperation with our consumers and business partners to build, refine
and evolve the ‘New’.
• Athlete innovation
Our clear focus is to produce the best and most innovative products for the athlete to enable them to perform
at their very best. To achieve this, we work closely together with athletes as well as numerous universities
and industry-leading companies, to better understand the needs of our target consumer.
In recent years, the adidas Group has introduced groundbreaking athlete innovations as an outcome of this
approach. These include, amongst others:
Boost: Launched in cooperation with BASF, Boost is an industry-first cushioning technology designed to
deliver maximum energy return, responsiveness and comfort to athletes. ◾The energy return is provided
by energy capsules in the midsole of the shoe, which store and release energy. In addition, Boost foam is
three times more temperature-resistant than standard EVA material.
ClimaChill: As a revolution in active cooling technology, the ClimaChill apparel range incorporates an
innovative fabric using titanium and 3D aluminium cooling spheres, which are strategically located to
correspond with the warmest area of the body, cooling skin down upon contact.
ClimaHeat: The ClimaHeat range has been engineered for athletes who require power insulation for
training in cold weather. The hollow-fibre fabrics are engineered with yarns that are built to have a hollow
core, allowing higher amounts of warm air to be trapped, which ensures greater insulation without adding
additional weight. The fibres also provide advanced moisture control by wicking sweat away from the body
and transporting it to the outer surface of the fabric.
• Manufacturing innovation
To simplify manufacturing, enable product innovation and bring the production of apparel and footwear
closer to the consumer, the adidas Group’s R&D activities are focused on new manufacturing technology.
Our goal is to combine state-of-the-art information technology with new manufacturing processes and
innovative products. For this reason, we commit ourselves to long-term cooperation with industry-leading
companies and organisations to take a leading role in manufacturing innovation.
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Futurecraft: The Futurecraft series is a forward-looking initiative that places Open Source collaboration
and craftsmanship at the heart of design to drive innovation across all elements of production. In 2015,
two groundbreaking design innovations were unveiled: the future of footwear with Futurecraft 3D and the
Futurecraft Leather. Futurecraft 3D is a unique 3D-printed running shoe midsole which can be tailored
to the cushioning needs of an individual’s foot. Futurecraft Leather is a revolutionary combination of a
high-tech manufacturing process and traditional material to create a completely seamless upper that
enables flex, support and comfort in one single piece of material.
• Sustainability innovation
Our commitment to manage our business in a responsible way has long been one of the Group’s principles. see Sustainability, p. 94
To stay at the forefront of sustainable innovation, the adidas Group is pursuing a proactive approach to
establish internationally recognised best practices and to achieve scalable improvements.
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PureBOOST X: adidas has teamed up with female athletes from around the world to create the PureBOOST X,
a running shoe made for women. While most running shoes are adaptations of male shoes, the PureBOOST X
was designed with only the female athlete in mind, resulting in a ‘high performance meets high fashion’
running shoe for women. The PureBOOST X is a product of innovation and style to meet the demands of
today’s female athlete.
Stella McCartney cooperation: Launched in 2005, adidas by Stella McCartney was the first functional sports
performance range for women designed by a luxury fashion designer. Offering a combination of technical
performance and style, the range includes apparel, footwear and accessories. Following on from the
success of the adidas by Stella McCartney collections, and designed to target a younger female audience,
the first adidas StellaSport collection was launched in January 2015. The range combines sport and style
with bold branding, colours and prints designed for the age group.
As in prior years, the majority of adidas Group sales were generated with products newly introduced in the
course of 2015. New products tend to have a higher gross margin compared to products which have been in s ee Subsequent Events
the market for more than one season. As a result, newly launched products contributed over-proportionately and Outlook, p. 148
to the Group’s net income in 2015. We expect this development to continue in 2016 as we will present a
wide range of new, innovative products.
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Research and Development
The adidas brand introduced numerous major product innovations in 2015. These included:
•• Ace and X: In 2015, adidas launched two new ranges of football boots which call for only two types of
players in the game: those that cause chaos and those that control everything. The new football silos
Ace and X successfully replaced the iconic franchises f50, Predator, 11Pro and Nitrocharge.
•• UltraBOOST: In February, adidas unveiled the UltraBOOST. This innovative running shoe brings
outstanding comfort and energy to runners thanks to the full-length Boost midsole, made of 3,000
energy capsules. The UltraBOOST contains 20% more Boost than initial Boost models and uses adidas
Primeknit to allow the natural expansion of any foot shape. This leads to improved comfort and support,
minimising the risk of chafing and blistering.
Product Brand
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•• Terrex Boost Outdoor: The combination of Terrex and Boost has proved to be successful, with extremely
positive signals from the market. In particular, the new terrex Agravic trail running shoe won the Outdoor
Industry Award 2015. This shoe features a Continental rubber outsole for excellent grip on dry and wet
surfaces and the innovative Boost cushioning.
•• NMD: With the launch of NMD, adidas Originals introduced a product inspired by the past but looking
forward to the future. This new shoe is a mix of iconic adidas Originals concepts and breakthrough
technology of today, such as Boost and Primeknit. NMD was created thanks to the inspiration given by
the archives of successful adidas styles of the past, such as the Micropacer, the Rising Star and the
Boston Super.
In 2015, Reebok presented several key product introductions. Some of the highlights included:
•• CrossFit Nano 5.0 training: In 2015, Reebok celebrated its five-year partnership with CrossFit with the
launch of the CrossFit Nano 5.0. This ultimate training shoe was developed by Reebok in association with
the CrossFit community and saw the introduction of Kevlar as one of the materials used, to guarantee
protection and durability even for the toughest workout of the day.
•• ZPump Fusion: Through ZPump Fusion, Reebok revolutionised its iconic Pump technology into a state-
of-the-art running shoe. This new footwear concept includes an air-filled cage, inflatable through the
Pump button that surrounds and moulds to any foot, providing a locked-in custom fit as never before.
•• UFC fight kit: In June 2015, Reebok together with the UFC, the world’s premier mixed martial arts
organisation, launched the first UFC fight kit. This gear was built and designed specifically for mixed
martial arts athletes. It features innovations that support strength, speed and flexibility, while allowing
each athlete to prominently display their names and country.
Despite ongoing challenges in the golf industry, TaylorMade-adidas Golf retained its status as the world’s
leading golf company in 2015, with market leadership in key categories such as metalwoods. However, in
light of the restructuring programme the company is currently undergoing, Management decided to shift
to longer product launch cycles and reduce the overall number of new product introductions compared
to previous years.
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Research and Development
As our R&D departments comprise experienced and multi-skilled people from different areas of technical
expertise and from diverse cultural backgrounds, personnel expenses represent the largest portion of
R&D expenses, accounting for almost 75% of total R&D expenditure. The number of people employed in
the Group’s R&D activities at December 31, 2015, was 993, compared to 985 employees in the prior year.
This represents 2% of total Group employees.
In 2015, R&D expenses represented 1.9% of other operating expenses (2014: 2.0%). R&D expenses as a see Table 03
percentage of sales remained relatively stable at 0.8% (2014: 0.9%).
1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the Rockport business.
2 2011 restated according to IAS 8.
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Our People
OUR PEOPLE
At the adidas Group, we believe that our people are the key to the company’s success. Their performance,
well-being and knowledge have a significant impact on brand desire, consumer satisfaction, speed-
to-market and our financial performance. The adidas Group has therefore developed a dedicated
‘People Strategy’, which is supported and filled with life by the entire workforce and all functions.
We focus our efforts on four fundamental people topics: the attraction and retention of the right
talents, role model leadership, diversity and inclusion, as well as the creation of a culture that is
consistent with our Group purpose.
The People Strategy was developed by a cross-functional group of employees from different levels and
locations. The extensive research this group conducted included the exploration of the personal meaning
of work, global human resources megatrends that our company will be facing and their impact on people,
organisations and innovation as well as the digital and physical workplace of the future.
The People Strategy consists of four pillars that define the culture we want to establish in order to
successfully support the Group’s strategy: see Diagram 01
People Strategy
Defines and inspires the right organisational culture to create the new
Attraction & retention Role model leadership Diversity & inclusion Culture
of the right talents
Meaningful reasons to join Role models who inspire us Bring forward fresh and diverse Creative climate to make
and stay perspectives a difference
Attract and retain great talent by Nurture and inspire role model Represent and live the diversity of It is our goal to develop a culture
offering personal experiences, leadership. our consumers in our people. that cherishes collaboration,
choices and individual careers. creativity and confidence – three
behaviours we deem crucial to
the successful delivery of our
corporate strategy.
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The four pillars serve as a basis for creating the right culture and environment for our people. They also
serve as a tool for prioritisation and for sense-checking our HR actions and initiatives.
•• Firstly, projects must add value to the most significant moments that matter in the lives and careers of
our people. With moments that matter, we describe significant stages and turning points our employees
experience throughout their career with the adidas Group. For example, we want to facilitate and
positively influence onboarding and next steps in career planning.
•• Secondly, projects must make the new HR organisation more efficient and effective.
More detailed information on the individual projects is provided in the info box. see info box, p. 90
Employee engagement: The adidas Group carries out employee engagement surveys in order to measure s ee Internal Group
the engagement and motivation of our employees. The results of these surveys are a non-financial KPI for Management System, p. 102
our Group. The outcome of our first two global engagement surveys, conducted in 2010 and 2013, were stable
at a rate comparable to the average engagement level of our survey provider’s client database. In 2013,
improvements were achieved in specific scores relating to performance management as well as learning
and development opportunities. The existing engagement survey approach is currently being re-designed,
given that both employees and business leaders are demanding a more pragmatic and frequent approach
that caters to the speed of change we are facing as an organisation. The new survey approach is planned
for the first quarter of 2017.
Employer rankings: Our ‘employer of choice’ status continues to garner worldwide recognition and enables
us to attract, retain and engage industry-leading talent to sustain the company’s success and growth. In
2015, adidas Group locations around the world leveraged our employer brand attributes for attraction,
retention and engagement strategies. This work contributed to several Top 10 rankings worldwide and see Diagram 02
has also enabled us to recruit some of the industry’s top talent.
02 AWARDS
The World’s Most Attractive Best Employer 2016/Glassdoor Employer Branding Quick Check/ Female Recruiting Award/
Employers/Universum Germany YouGov Germany women&work fair
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Our People
The adidas Group remuneration system is based on this performance management approach. As part of
this system, we are committed to rewarding our employees with compensation and benefit programmes
that are competitive in the marketplace. Remuneration throughout the Group comprises fixed and variable
monetary compensation, non-monetary rewards as well as other intangible benefits. The cornerstone of
our rewards programme is our Global Salary Management System, which is used as a basis for establishing
and evaluating the value of employees’ positions and salaries in a market-driven and performance-oriented
way. The various variable compensation components we offer our employees include:
Bonus programme: In order to allow our employees to participate in the Group’s success, and to reward
them for their target achievement, we have a global bonus programme. It provides an incentive influenced
by both corporate performance (actual financial results measured against Group and market targets) as
well as individual performance (measured in the performance management approach, The Score).
Profit participation programme: For employees at our Group headquarters and our other locations in
Germany who do not participate in the bonus programme, we have a profit participation programme called
the ‘Champions Bonus’.
Long-term incentive programmes: In order to ensure sustainable financial success, retain our top
leadership and promote continuous commitment, the adidas Group offers a Long-Term Incentive Plan
(LTIP) for leaders and Executive Board members. Other benefits include our 401(k) retirement plans in
the USA and the adidas Group pension plan for our employees in Germany.
Our Group subsidiaries also grant a variety of benefits to employees, depending upon locally defined
practices and country-specific regulations and norms.
Succession management: The adidas Group succession management approach aims to ensure stability
and certainty in business continuity. We achieve this through a globally consistent succession plan which
covers successors for director level positions and above. We conduct regular reviews to ensure individual
development plans are in place to prepare successors for their potential next steps.
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Our People
03 INFO BOX
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At our Group’s global headquarters in Herzogenaurach, we have employees from more than 80 nations.
As part of our global diversity approach we proactively pursue a portfolio of internal and external activities
as well as memberships:
•• Our active membership in ‘Charta der Vielfalt’ (‘Diversity Charter’), Prout at Work and the non-profit
organisation ‘Catalyst’ allows us to promote communication and the sharing of best practices and
insights.
•• We have regular events highlighting diversity as a key topic, such as our global Diversity Day.
•• We provide diversity training to our employees.
•• Within our Group, for example, we support the 500-member strong ‘Women’s Networking’ group in
Herzogenaurach. Additionally, we continue our support of the international LGBT community, which is see Glossary, p. 260
also driven by our employees at our major Group locations.
•• We have been participating in diversity career fairs in Germany, such as the ‘Women & Work’ conference
in Bonn and ‘Sticks & Stones’ in Berlin. In Bonn, we were awarded the ‘Female Recruiting Award’ for
the fifth time in 2015.
•• The adidas Group is listed in the genderdax and was a sponsor of the Mixed Leadership Conference in see Glossary, p. 260
2015, 2013 and 2012.
•• We regularly take part in benchmark studies in order to review our activities in the fields of diversity
and inclusion.
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Already in 2011, the adidas Group proactively set itself the goal of increasing the number of women in
leadership positions in the coming years. Specifically, the percentage share of women in management
positions is targeted to be increased globally from 29% today to 32% by 2017.
Irrespective of that, German law states that, from January 1, 2016, at least 30% of Supervisory Board
representatives of publicly listed companies such as adidas AG shall be women. Since the 2014 Annual
General Meeting, the female representation on our Supervisory Board amounts to 30%. In addition, as of
September 30, 2015, the Supervisory Board was required to set targets with regard to the quota of women
on the Executive Board, and the Executive Board was required to set targets with regard to the quota of
women on the two levels below the Executive Board. We have therefore defined such targets for adidas AG
in addition to our global mixed leadership goals.
As a result, the Supervisory Board and Executive Board of adidas AG have set the following specific targets
to be achieved by June 30, 2017:
•• The Supervisory Board will appoint one woman to the adidas AG Executive Board.
•• The percentage share of women at Board -1 level will be increased from 11% (as at July 2, 2015) to 18%.
•• The percentage share of women at Board -2 level will be increased from 26% (as at July 2, 2015) to 30%.
A prerequisite for increasing the number of women at the highest levels of management is the general
www.adidas-group.com/en/
promotion of women within the adidas Group worldwide at all levels of management. In 2016, our initiatives sustainability/employees/
will focus on developing a concrete strategy to promote the gender balance. diversity-and-inclusion
2015 2014
1 At year-end. Figures reflect continuing operations as a result of the divestiture of the Rockport business.
2 Number of employees on a headcount basis.
3 Calculated in accordance with German Act on Equal Participation of Women and Men in Executive Positions in the Private and Public Sector
in Germany.
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1 At year-end. Figures reflect continuing operations as a result of the divestiture of the Rockport business.
2 Number of employees on a headcount basis.
3 Number of employees on a full-time equivalent basis.
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Sustainability
SUSTAINABILITY
The adidas Group is responsible for developing and implementing sustainable business practices
that adhere to our operational needs as well as our social and environmental obligations. We
therefore continuously engage with various stakeholders with the goal of enhancing the sustainability
performance of the Group.
Strict rules: It was our concern for the well-being and working conditions for workers in our suppliers’ www.adidas-group.com/s/
factories that led us to establish our ‘Workplace Standards’, the supply chain code of conduct. They are a standards-and-policies
contractual obligation under the manufacturing agreements the adidas Group signs with its main business
partners and cover workers’ health and safety and provisions to ensure environmentally sound factory
operations. These standards follow International Labour Organization (ILO) and United Nations conventions
relating to human rights and employment practices, as well as the model code of conduct of the World
Federation of the Sporting Goods Industry (WFSGI).
Selection of new suppliers: In close cooperation with Global Operations and other sourcing entities, all see Global Operations, p. 74
potential new suppliers are assessed by the adidas Group’s Social & Environmental Affairs (SEA) team,
and orders with a new supplier can only be placed if SEA approval has been granted.
Visiting and rating our factories: To enforce compliance with our standards, the SEA team regularly
conducts social compliance and environmental audits, using in-house technical staff as well as external
third party monitors. By means of an innovative compliance rating system (C rating) we assess the s ee Internal Group Management
performance of our suppliers. These ratings are a non-financial KPI for our Group. System, p. 102
MATERIALITY ANALYSIS
More information about our materiality analysis can be found on our website.
W W W. ADIDAS- GROUP.COM/S/MATERIALITY-AN ALYSI S
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Sustainability
•• Factory visits: During 2015, we conducted 1,255 factory visits (2014: 1,320 visits) comprising different
types of audits (including chemical management audits), trainings and meetings with factory management
as well as employees at various levels in our supply chain. In addition to our own monitoring activities,
we value independent and unannounced assessment by third parties to demonstrate the credibility of
and provide verified information about our programme to stakeholders. As a member of the Fair Labor
Association (FLA), the adidas Group is subject to external assessment by independent monitors, partici-
pation in the FLA third-party complaint system and public reporting. Since joining the organisation in
1999, the monitoring programme of the adidas Group has been accredited twice by the FLA. During
this period, more than 300 independent assessments have been conducted at adidas Group suppliers.
•• Compliance rating: According to the results of factory inspections, suppliers are assessed with a score
between 1C and 5C, with 5C being the best rating. The rating results are shared with our Sourcing
teams which then decide whether and to which extent we continue the business relationship with a
specific supplier. In 2015, we saw a further decline in the number of low-performing suppliers (1C and
2C) and at the same time a notable increase of suppliers qualifying for self-governance (factories that
have reached 4C or 5C status). More supplier factories qualifying for self-governance status means
that factories have proven to operate effective human resources, health and safety as well as environ-
mental management systems by themselves. As a result, we were able to reduce the number of factory
visits in 2015 compared to the prior year. Overall, 68% (2014: 64%) of our direct suppliers have received
a 3C (good) or better rating.
01 COMPLIANCE RATINGS
1C 0% – 29% There are numerous severe non-compliance issues and no compliance management and compliance practices
in place. The factory has been given notice that business will be terminated unless there is immediate
improvement.
2C 30% – 59% There are some non-compliance issues and no compliance management systems. However, there are some
effective compliance practices being delivered.
3C 60% – 79% There are minor non-compliance issues. The factory has compliance management systems and some effective
compliance practices in place.
4C 80% – 89% Generally, there are no non-compliance issues. The factory has compliance management systems in place,
and most of the components are effective.
5C 90% – 100% There are no non-compliance issues and all of the factory's management systems and practices are well
delivered and effective.
1C 2C 3C 4C 5C
53
50 48 47
43 43 41 43
39
40
34
30 28
30 25 23
19
20
14
9 11 10
10 8 7
3 3 2 2 4 3 3 3
1 1
0
1 The table presents the C-KPI percentage of direct suppliers. Please note that in 2012 we moved to a KPI reporting methodology that only considers the latest KPI score of each supplier,
instead of taking the average of all previous KPI scores into account.
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Training our suppliers: The results from our compliance rating also enable us to precisely determine
training needs at our suppliers’ factories. The adidas Group has initiated a system of multi-level and cross-
functional training sessions together with its global supplier network. In 2015, the SEA team conducted
120 training sessions and workshops (2014: 131). We offered more group trainings, i.e. training sessions
for more than one supplier instead of individual training sessions. That way, we have been able to achieve
higher efficiencies and provide opportunities for cross-learning and best-practice sharing among suppliers.
All our programmes are built on three complementary pillars – community involvement, employee
engagement and corporate giving – determined by local cultural, economic and social factors. Programmes
on Group level are supplementary programmes led by our SEA team. They include activities at Group
headquarters, projects in suppliers’ countries and relief operations.
In 2015, we targeted considerable volumes of our financial and product donations to people affected by
the refugee crisis and worked in close collaboration with our long-term partners Wings of Help (Luftfahrt
ohne Grenzen) and SOS Children’s Villages as well as various other local organisations. In addition, we
initiated an ad hoc relief fund to support people after the Nepal earthquake. Further information can be www.adidas-group.com/s/
found on our website. community-engagement
1) Committed to drive innovation: The adidas Group collaborates with organisations and industry partners
to accelerate innovation in its sustainable product manufacturing.
•• Parley for the Oceans: In 2015, the adidas Group partnered up with Parley for the Oceans, an organ
isation engaging in ocean conservation and eco innovation that creates awareness to end the destruction
of the oceans. Among other projects, this collaboration will drive the creation of innovative products
and the integration of materials made from ocean plastic waste into products. The adidas Group has
already taken immediate concrete steps in this direction such as the creation of the world’s first shoe
made of yarns and filaments reclaimed and recycled from ocean waste, followed by the presentation
of a 3D-printed ocean plastic shoe midsole. Additionally, the adidas Group has committed to phase out
the use of plastic bags in its own-retail stores and, together with its partner COTY, ended the use of
plastic microbeads across all its body care products as of December 31, 2015. Further information can www.adidas-group.com/s/
be found on our website. parley-for-the-oceans
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•• Sport Infinity: Also in 2015, the adidas Group announced ‘Sport Infinity’, a research project led by
adidas and funded by the European Commission, bringing together a variety of industry and academic
experts. The aim of the project is to develop a material that can be endlessly recycled using a waste-
free, adhesive-free process. As a result, sporting goods could be constantly recycled. Sport Infinity is
the next step in the Group’s commitment to innovation and adds to our goal of closing the sustainability www.adidas-group.com/s/
loop. Further information can be found on our website. sport-infinity
2) Going mainstream with Better Cotton and recycled polyester: Environmentally preferred materials
have replaced conventional materials in many of our footwear and apparel products. With the increased
use of more sustainable materials such as Better Cotton and recycled polyester we are constantly reducing
our impact on the environment.
•• Better Cotton: The adidas Group is committed to increasing the sourcing volumes of cotton from the
Better Cotton Initiative (BCI) over the next years. The BCI aims to reduce the use of pesticides, but www.bettercotton.org
also promotes efficient water use, crop rotation and fair working conditions. In 2015, we exceeded our
target of 40% by sourcing 43% of all our cotton as Better Cotton, which is a great step towards our 2018
target to source 100% of cotton in our products as sustainable cotton. ‘Sustainable cotton’ in this sense
means Better Cotton, certified organic cotton or any other form of sustainably produced cotton that is
currently available or might be in future.
•• Recycled polyester: Using recycled polyester has many benefits over virgin polyester. It helps us reduce
our dependency on petroleum, allows us to discharge less waste and keeps polyester from ending up
in landfills. While virgin polyester is made from petroleum, recycled polyester is made from recycled
waste, such as plastic bottles and used clothing, which is processed and spun into fibres. We are using
recycled PES in more and more of our apparel and footwear.
3) Rigorous control for safe products: We have specified clear standards for the use of restricted
substances that follow the strictest local regulations and best-practice standards for consumer care and www.adidas-group.com/s/
safety. The Restricted Substances Policy for product materials prohibits, for example, the use of chemicals product-safety
considered harmful or toxic, the sourcing or processing of raw materials from any endangered or threatened
species, as defined by the International Union for Conservation of Nature and Natural Resources (IUCN)
in its red list and also prohibits using leathers, hides or skins from animals that have been inhumanely
treated, whether these animals are wild or farmed. They are mandatory for all business partners and are
updated regularly based on findings in our ongoing dialogue with scientific organisations. Both our own
quality assurance laboratories and external testing institutes are used to constantly monitor material
samples to ensure supplier compliance with these requirements. Materials that do not meet our standards
and specifications are rejected.
During 2015, we developed the second generation of our Green Company programme, including targets to www.adidas-group.com/s/
be achieved by 2020. These new targets build on our seven years of achievements and also demonstrate green-company
our continued focus on industry leadership in environmental stewardship. Some highlights include science-
based targets for carbon reduction and context-based water reduction targets. In addition, we expanded
the scope of the Green Company programme to our own stores globally.
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Certification of factories: The majority of our footwear sourcing volume is produced in factories which are
OHSAS 18000 and/or ISO 14001 certified. The remaining part of our footwear sourcing volume is produced in
factories that have management systems in place but have not yet been certified. All footwear factories are
regularly assessed against the adidas Group’s standards on environment and workplace health and safety.
•• Product safety: Since pioneering the Restricted Substances Policy in 1998, which is updated annually,
the company continues to develop policies which ban or restrict chemicals in our products.
•• Environmental audits: A series of guidelines for suppliers with comprehensive and detailed standards
on handling, storage and disposal of chemicals as well as standards for waste water treatment and
effluents are the basis for the factory inspections and assessments conducted by our SEA team and
external auditors. In 2015, the company conducted 138 environmental audits (including chemical
management audits) at its suppliers’ factories (2014: 143).
•• Chemical input: In addition to the established use of the bluesign technologies bluefinder which guides
our suppliers in choosing the right chemicals, we successfully phased out the use of long-chain PFCs
in 2014.
•• Disclosure/transparency: As part of our approach in enhancing disclosure practices and transparency
within our supply chain, the adidas Group has actively promoted reputable platforms such as the Institute
of Public and Environmental Affairs (IPE) China Water Pollution Map and China Air Pollution Map and
achieved the disclosure of 50% of all ‘wet processes’ across its global supply chain at the end of 2015.
A key element of our transparent communication is the disclosure of our global supplier factory list on w ww.adidas-group.com/s/
our website. First published in 2007 and updated twice a year, it is complemented with factories that supply-chain-structure
manufactured products for major sport events such as the FIFA World Cup or Olympic Games.
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99
FINAN –
CIAL
Internal Group Management System 102
Group Business Performance 107
• Economic and Sector Development 107
• Income Statement 111
• Statement of Financial Position and Statement of Cash Flows 119
• Treasury 124
• Financial Statements and Management Report of adidas AG 130
• Disclosures pursuant to § 315 Section 4 and § 289 Section 4
of the German Commercial Code 134
Business Performance by Segment 138
• Western Europe 139
• North America 140
• Greater China 141
• Russia/CIS 142
• Latin America 143
• Japan 144
• MEAA (Middle East, Africa and other Asian markets) 145
• Other Businesses 146
Subsequent Events and Outlook 148
• Subsequent Events 148
• Outlook 148
Risk and Opportunity Report 156
• Illustration of Material Risks 162
• Illustration of Opportunities 173
Management Assessment of Performance,
Risks and Opportunities, and Outlook 175
INTERNAL GROUP
MANAGEMENT SYSTEM
The adidas Group’s principal financial goal for increasing shareholder value is maximising operating
cash flow. We strive to achieve this goal by continually improving our top- and bottom-line performance
while at the same time optimising the use of invested capital. Our Group’s planning and controlling
system is therefore designed to provide a variety of tools to assess our current performance and
to align future strategic and investment decisions to best utilise commercial and organisational
opportunities.
Net sales
Operating profit
Operating
cash flow
Change in operating working capital
Capital expenditure 1
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Sales and gross margin development: Management focuses on identifying and exploiting growth
opportunities that not only provide for future top-line improvements, but also have potential to increase
gross margin. Major levers for enhancing our Group’s sales and gross margin include:
•• Minimising clearance activities, while at the same time increasing full-price share of sales.
•• Optimising our product mix.
•• Improving the quality of distribution, with a particular focus on controlled space. see Glossary, p. 260
•• Realising supply chain efficiency initiatives.
Operating expense control: Management puts high emphasis on tightly controlling operating expenses to
leverage the Group’s sales growth through to the bottom line. This requires a particular focus on ensuring
flexibility in the Group’s cost base. Expenditure for marketing investments is one of our largest operating see Glossary, p. 260
expenses and at the same time one of the most important mechanisms for driving brand desirability and
top-line growth sustainably. Therefore, we are committed to improving the utilisation of our marketing
expenditure. This includes concentrating our communication efforts on key global brand initiatives and
focusing our promotion spend on well-selected partnerships with top events, leagues, clubs, athletes and
artists.
We also aim to increase operational efficiency by tightly managing operating overhead expenses. In this see Glossary, p. 260
respect, we regularly review our operational structure – streamlining business processes, eliminating
redundancies and leveraging the scale of our organisation. These measures may also be supplemented
by short-term initiatives such as temporarily curtailing operational investments, for example staff hiring.
Furthermore, we carefully analyse the different mix effects which impact the Group’s profit ratios, as
our business performance differs significantly across geographical markets, business models and sales
channels. The strategic implications and decisions taken in this respect are a key element of our strategic
planning efforts, ensuring clarity and focus of the organisation to balance and broaden the Group’s future
earnings stream and to sustainably increase the Group’s operating margin.
We strive to proactively manage our inventory levels to meet market demand and ensure fast replenishment.
Inventory ageing is controlled carefully to reduce inventory obsolescence and to minimise clearance
activities. As a result, inventory days lasting is an important metric as it measures the average number of
days goods remain in inventory before being sold, highlighting the efficiency of capital locked up in products.
To optimise capital tied up in accounts receivable, we strive to improve collection efforts in order to reduce
the Days of Sales Outstanding (DSO) and improve the ageing of accounts receivable. Likewise, we strive to
optimise payment terms with our suppliers to best manage our accounts payable.
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The final step of optimising return on investments is our selective post-mortem reviews, where larger
projects in particular are evaluated and learnings are documented to be available for future capital
expenditure decisions.
In the context of our strategic business plan ‘Creating the New’, we aim to further widen our holistic
performance management approach beyond financials. As a consequence, 2016 will see the first initiatives
towards ‘Integrated Performance Management’, which will be the engine to providing more transparency
to all parts of our business for even better decision-making and further enhancing true value creation.
Average operating
Gross profit Operating working capital
Gross margin = × 100 working capital
Net sales in % of net sales = × 100
Net sales
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Market share and Net Promoter Score (NPS): Maintaining and enhancing brand image and reputation
through the creation of strong brand identities is crucial for sustaining and driving revenue and profit growth.
It is also an important credential as we extend our brands into new categories and regions. Therefore, mainly
on a market and category level, we invest in primary qualitative and quantitative research such as trend
scouting, consumer surveys and market share data to determine brand and category strength. Measures
that are regularly tracked include market shares, brand awareness, likeability and purchase intent. In
addition, within the framework of ‘Creating the New’, we implemented a Net Promoter Score (NPS) which
strengthens our capabilities to more carefully review brand perception. These efforts are driven by our s ee Management Assessment
of Performance, Risks and
global market research and consumer insight teams and monitored on a regular basis. The results are also Opportunities, and Outlook,
reflected in the variable compensation for Executive Board members and the majority of our employees. p. 148
Backlogs and sell-through data: To manage demand planning and anticipate our future performance,
backlogs comprising orders received up to nine months in advance of the actual sale are monitored see Glossary, p. 260
closely. However, due to the growing share of own retail in our business mix as well as fluctuating order
patterns among our customers, order books at the Group level are less indicative of anticipated revenues
for the adidas Group compared to the past. Therefore, qualitative feedback from our retail partners on the
sell-through success of our collections at the point of sale as well as data received from our own-retail
activities is becoming increasingly important.
On-Time In-Full (OTIF): OTIF measures the adidas Group’s delivery performance towards customers and
our own-retail stores. Managed by our Global Operations function, OTIF assesses to what degree customers
received what they ordered and if they received it on time. It helps our Group to investigate improvement
potential in the area of order book management and logistics processes. It therefore also helps us to
improve our delivery performance, which is a major aspect when it comes to customer satisfaction. The
OTIF assessment covers both the adidas and Reebok brands in most of our key markets. see Global Operations, p. 74
Employee engagement: To measure the level of engagement and motivation of our employees, the adidas
Group carries out employee engagement surveys. These surveys aim to provide key insights into how well
as an employer we are doing in engaging our employees. They thus enable us to develop the right focus
and future people strategies across our organisation. Against the background of organisational changes
within the Group, the existing engagement survey approach is currently being re-designed with regard to
the survey’s scope and frequency. The new survey approach is planned for 2017. see Our People, p. 87
Sustainability performance: We have a strong commitment to enhance the social and environmental
performance of our Group. By doing so, we firmly believe we will not only improve the Group’s overall
reputation, but also increase our economic value. We have therefore implemented a comprehensive
sustainability programme under which we regularly review our performance. We closely monitor our see Sustainability, p. 94
sustainability targets and have set ourselves clear milestones. A major focus lies on monitoring and
rating our factories with regard to compliance with our Workplace Standards and rating the effectiveness
of compliance systems. A rating tool helps us evaluate six fundamental elements of social compliance. see Sustainability, p. 94
We have a strong track record in sustainability reporting, with our Sustainability Progress Report being
an integral part of this. All our social and environmental publications, which include more details and www.adidas-group.com/en/
sustainability/reporting-
additional data, are provided on our corporate website. policies-and-data/
sustainability-reports
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Internal Group Management System
Taking into account year-to-date performance as well as opportunities and risks, the Group’s full year
financial performance is forecasted four times a year. In this respect, also backlogs, sell-through data,
feedback from customers and own-retail stores are assessed as available. Finally, as a further early
indicator for future performance, the results of any relevant recent market and consumer research are
assessed as available.
The whole process is set up in a rhythm and timeframe to facilitate full cross-functional alignment and
forecasting clarity in advance of important business decision processes – in particular those related to
product pricing, range building, material purchasing or production capacity fixing. To create a seamless flow
between achieving our strategic objectives and implementing operational plans, we follow a rolling two-year
time horizon. This ensures more focus on the mid-term perspective, while at the same time highlighting
relevant information around short-term business events and volatilities. All target-setting is fully embedded
into the integrated planning process and communicated in advance of all relevant business milestones.
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GROUP BUSINESS
PERFORMANCE
In 2015, the adidas Group delivered a stellar financial performance. Currency-neutral Group sales
increased 10%, driven by strong growth at both adidas and Reebok. In euro terms, Group revenues
grew 16% to € 16.915 billion from € 14.534 billion in 2014. The Group’s gross margin increased
0.6 percentage points to 48.3% (2014: 47.6%), driven by the positive effects from a more favourable
pricing, channel and category mix. In 2015, the adidas Group incurred goodwill impairment losses of
€ 34 million (2014: € 78 million). These one-off expenses were non-cash in nature and did not affect
the adidas Group’s liquidity. Other operating expenses as a percentage of sales grew 0.4pp to 43.1%,
as a result of the planned increase in expenditure for point-of-sale and marketing investments,
reflecting the Group’s efforts to strengthen brand desirability. Excluding goodwill impairment losses,
the Group’s operating profit increased 14% to € 1.094 billion compared to € 961 million in 2014,
representing an operating margin of 6.5%, down 0.1 percentage points compared to the prior year
(2014: 6.6%). The Group’s net income from continuing operations excluding goodwill impairment
losses was up 12% to € 720 million (2014: € 642 million). In 2015, the adidas Group incurred losses
from discontinued operations of € 46 million (2014: losses of € 68 million). Net income attributable
to shareholders from continuing and discontinued operations excluding goodwill impairment losses
was up 18% to € 668 million (2014: € 568 million). Basic and diluted earnings per share (EPS) from
continuing and discontinued operations excluding goodwill impairment losses increased 22% to
€ 3.32 from € 2.72 in 2014.
GDP in Western Europe grew 1.7% in 2015, supported by lower energy prices, a weakening of the euro,
robust export growth and the increasingly accommodative monetary policy followed by the ECB. Most of
the region’s economies were characterised by low inflationary pressures and rising domestic demand,
with Spain and the UK in particular recording healthy GDP growth. Despite an improvement in consumer
confidence levels, high unemployment levels in certain markets, subdued wage growth and public debt
dynamics still resulted in lacklustre GDP increases in many of the region’s countries.
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European emerging markets recorded GDP growth of 0.8% in 2015, reflecting a slowdown from previous
years. The expansion was driven by modest export activity as well as wage growth resulting in firm consumer
spending. The deceleration from previous years was mainly the result of ongoing political unrest in Russia
and Ukraine as well as high inflationary pressures in these countries, which resulted in lower consumer
and investment spending. Russia’s economy was particularly negatively impacted by sanctions and high
inflationary pressures, which together with low oil prices and the continuing weakness of the rouble put
additional pressure on consumer sentiment and the overall state of the economy.
The US economy grew modestly in 2015, expanding 2.5%, driven by low inflationary pressures, improving
labour and housing market conditions as well as low oil prices that bolstered consumer spending. However,
lacklustre global growth, low energy prices and the continuing strength of the US dollar put pressure on
the industrial sector and export growth. The US Federal Reserve’s decision to increase interest rates
for the first time in nearly a decade in December reflects the improvements in the US economy and, in
particular, the labour market.
Asia remained the fastest-growing region with 3.8% GDP growth, although economic expansion slowed
compared to previous years. In China, growth slowed to 6.9%, due to lower industrial production, less activity
in the manufacturing sector as well as soft export growth and inhibited investment. Japan’s economy saw a
slight recovery with 0.6% growth, driven by an accommodative monetary policy, increases in real disposable
income, export growth as well as rising consumer and business sentiment. India’s economy expanded
by 7.3% in 2015, as low inflationary pressures and lower commodity prices fuelled consumer spending.
In Latin America, GDP remained stable versus the prior year with divergences across the region’s major
countries. Argentina’s economy recorded positive GDP growth, driven by improvements in the labour
market as well as increased government spending. In Brazil, low investment activity, weak consumer
confidence, political instability, unfavourable debt dynamics and rising unemployment drove further
economic contraction and deepened the country’s recession. Other regional economies such as Mexico,
Colombia and Chile posted healthy GDP increases in 2015, with increasing private consumer spending,
wage growth and stronger domestic demand fuelling expansion.
5
4.3
4 3.8 3.8
3
2.4 2.6 2.4 2.5 2.4 2.4 2.5 2.5
2 1.7 1.5
1.4
1.1
1 0.8
0.3
0.0
0
1 Real, percentage change versus prior year; 2013 and 2014 figures restated compared to prior year.
2 Source: World Bank.
3 Source: HSBC.
4 Includes Japan and Area Pacific.
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In Western Europe, improvements in consumer sentiment supported growth of the sector. In European
emerging markets, a contraction in disposable income driven by high inflationary pressures and the
continuing weakness of the rouble negatively impacted consumer sentiment and spending and detracted
from the sporting goods sector’s expansion, especially in Russia.
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
USA 2 5.7 5.5 5.4 5.1 5.0 USA 2 0.8 (0.1) 0.1 0.0 0.7
Euro area 3 11.4 11.2 11.0 10.7 10.4 Euro area 3 (0.2) (0.1) 0.2 (0.1) 0.2
Japan 4 3.4 3.4 3.4 3.4 3.3 Japan 4 2.4 2.3 0.4 0.0 0.2
China 5 4.1 4.1 4.0 4.1 5.1 China 5 1.5 1.4 1.4 1.6 1.6
Russia 6 5.3 5.9 5.4 5.2 5.8 Russia 6 11.4 16.9 15.3 15.7 12.9
Brazil 7 4.3 6.2 6.9 7.6 6.9 Brazil 7 6.4 8.1 8.9 9.5 10.7
1 Quarter-end figures.
2 Source: Conference Board.
3 Source: European Commission.
4 Source: Economic and Social Research Institute, Government of Japan.
5 Source: China National Bureau of Statistics.
6 Source: Russia Federal Service of State Statistics.
7 Source: Brazil National Confederation of Industry.
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05 EXCHANGE RATE DEVELOPMENT 1 € 1 EQUALS 06 2015 OIL PRICE DEVELOPMENT 1 IN US $ PER BARREL
Average Q1 2015 Q2 2015 Q3 2015 Q4 2015 Average | Jan. 1, 2015 Dec. 31, 2015 |
rate 2014 rate 2015
70
USD 1.3296 1.0759 1.1189 1.1203 1.0887 1.1101
GBP 0.8066 0.7273 0.7114 0.7385 0.7340 0.7259
50
JPY 140.44 128.95 137.01 134.69 131.07 134.42
RUB 50.737 62.902 62.126 74.205 79.347 67.682
30
CNY 8.1919 6.6084 6.8405 7.1266 7.0696 6.9721
In North America, the sporting goods industry posted a robust performance, benefiting from rising real
disposable income and low inflationary pressure within the region. From a category perspective, casual
athletic footwear continued to be in strong demand, fuelled by sales growth both in classics and in lifestyle
silhouettes, outperforming other categories. While basketball footwear posted modest growth driven by
lifestyle basketball, running footwear sales benefited mainly from fashion styles. In addition, sales in
sports apparel saw a modest decline and were negatively impacted by unfavourable weather conditions.
Although further signs of a slow recovery in the golf market appeared during the second half of 2015 due
to unseasonably warm weather and new product introductions, structural changes continued to persist.
In Asia, low inflationary pressures and wage growth bolstered disposable income and consumer spending,
promoting the expansion of the sporting goods industry. This trend was particularly evident in China,
supporting healthy industry growth, especially in the lower-tier cities. Sporting goods sales in Japan saw
improvements as the year developed, driven by stronger consumer spending and domestic demand. In
India, the size of the sector continued to expand at a strong pace.
The sporting goods industry in Latin America grew only slightly in 2015, as low unemployment levels and
wage increases were partially offset by high inflationary pressures and subdued consumer spending. In
particular Brazil, a market which benefited the most in the prior year from the 2014 FIFA World Cup, was
negatively impacted by these developments.
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Group Business Performance – Income Statement
INCOME STATEMENT
2015 16,915
2014 14,534
2013 14,203
2012 14,883
2011 13,322
1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the
Rockport business.
2 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
1 Figures reflect all operating activities of the adidas Group’s operating segments, including
Other Businesses.
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Revenues in Other Businesses were down 3% on a currency-neutral basis. High-single-digit sales increases
at Reebok-CCM Hockey and double-digit sales increases in Other centrally managed businesses were more
than offset by sales declines at TaylorMade-adidas Golf.
With the exception of Russia/CIS and Latin America, currency translation effects had a positive impact on
segmental sales in euro terms.
9
49% Footwear
49 41% Apparel
41
9% Hardware
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At December 31, 2015, the adidas Group, as part of the adidas and Reebok own-retail activities, operated
2,722 stores compared to the prior year-end level of 2,913. This mainly reflects the planned store closures see Table 11
in Russia/CIS as well as the reclassification of a number of concession corners to the wholesale channel.
Of the total number of stores, 1,484 were adidas and 366 were Reebok branded (December 31, 2014:
1,616 adidas stores, 446 Reebok stores). In addition, the adidas Group operated 872 multi-branded adidas
and Reebok factory outlets (December 31, 2014: 851). During 2015, the Group opened 284 new stores,
321 stores were closed, 154 were reclassified and 113 stores were re-modelled.
2015 2014
■ 2014 ■ 2015
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1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the 1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the
Rockport business. Rockport business.
2 2011 restated according to IAS 8 in the 2012 consolidated financial statements. 2 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the 1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the
Rockport business. Rockport business.
2 2011 restated according to IAS 8 in the 2012 consolidated financial statements. 2 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
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2015 2014
■ 2014 ■ 2015
Total
1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the Rockport business.
2 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
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2015 1,475
2014 1,283
2013 1,496
2012 1,445
2011 1,199
1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the
Rockport business.
2 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
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Group Business Performance – Income Statement
1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the 1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the
Rockport business. Rockport business.
2 2015 exluding goodwill impairment of € 34 million. 2 2015 exluding goodwill impairment of € 34 million.
3 2014 exluding goodwill impairment of € 78 million. 3 2014 exluding goodwill impairment of € 78 million.
4 2013 excluding goodwill impairment of € 52 million. 4 2013 excluding goodwill impairment of € 52 million.
5 2012 excluding goodwill impairment of € 265 million. 5 2012 excluding goodwill impairment of € 265 million.
6 2011 restated according to IAS 8 in the 2012 consolidated financial statements. 6 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
22 NET FINANCIAL EXPENSES 1 € IN MILLIONS 23 INCOME BEFORE TAXES 1, 2, 3, 4, 5, 6 € IN MILLIONS
1 2011 restated according to IAS 8 in the 2012 consolidated financial statements. 1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the
Rockport business.
2 2015 exluding goodwill impairment of € 34 million.
3 2014 exluding goodwill impairment of € 78 million.
4 2013 excluding goodwill impairment of € 52 million.
5 2012 excluding goodwill impairment of € 265 million.
6 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
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Group Business Performance – Income Statement
1 Includes continuing and discontinued operations. 1 Includes continuing and discontinued operations.
2 2015 exluding goodwill impairment of € 34 million. 2 2015 exluding goodwill impairment of € 34 million.
3 2014 exluding goodwill impairment of € 78 million. 3 2014 exluding goodwill impairment of € 78 million.
4 2013 excluding goodwill impairment of € 52 million. 4 2013 excluding goodwill impairment of € 52 million.
5 2012 excluding goodwill impairment of € 265 million. 5 2012 excluding goodwill impairment of € 265 million.
6 2011 restated according to IAS 8 in the 2012 consolidated financial statements. 6 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
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ACCOUNTING POLICY
The Group’s consolidated financial statements are prepared in accordance with the International Financial see Note 01, p. 190
Reporting Standards (IFRS), as adopted by the EU. In 2015, new standards and interpretations and
amendments to existing standards and interpretations were applicable. The changes mainly require
additional disclosures in the Group’s financial statements.
ROCKPORT DIVESTITURE
As of July 31, 2015, the Rockport operating segment was divested. As a result, all relevant assets
and liabilities were derecognised from the consolidated statement of financial position as of see Note 11, p. 205
this date. Already at December 31, 2014, all assets and liabilities of the Rockport operating segment were
presented as assets and liabilities classified as held for sale due to the existence of a concrete plan to sell
this operating segment.
ASSETS
At the end of December 2015, total assets increased 7% to € 13.343 billion versus € 12.417 billion in the
prior year, mainly as a result of an increase in non-current assets. The share of current assets within total see Diagram 28
assets decreased to 56%, while the share of non-current assets increased to 44% at the end of December
2015. This compares to 59% and 41%, respectively, at the end of December 2014.
2015 2014
■ 2014 ■ 2015
2015 2014
■ 2014 ■ 2015
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Total current assets increased 2% to € 7.497 billion at the end of December 2015 compared to € 7.347 billion
in 2014. Cash and cash equivalents decreased 19% to € 1.365 billion at the end of December 2015 from
€ 1.683 billion in the prior year, as net cash generated from operating activities was more than offset by net
cash used in investing and financing activities. In addition, currency effects had a negative impact on cash
and cash equivalents in an amount of € 126 million. Group inventories increased 23% to € 3.113 billion at see Note 09, p. 205
the end of December versus € 2.526 billion in 2014. On a currency-neutral basis, inventories grew 25%, see Diagram 29
reflecting higher stock levels to support the Group’s top-line momentum. The Group’s accounts receivable see Note 07, p. 204
increased 5% to € 2.049 billion at the end of December 2015 (2014: € 1.946 billion). On a currency-neutral see Diagram 30
basis, accounts receivable increased 3%. Other current financial assets decreased 8% to € 367 million
at the end of December 2015 from € 398 million in 2014. This development was driven by a decrease in see Note 08, p. 204
the fair value of financial instruments. Other current assets increased 15% to € 489 million at the end of
December 2015 (2014: € 425 million), mainly due to an increase in tax receivables other than income taxes. see Note 10, p. 205
Total non-current assets grew 15% to € 5.846 billion at the end of December 2015 from € 5.070 billion in
2014. Fixed assets increased 15% to € 4.986 billion at the end of December 2015 versus € 4.346 billion in
2014. Fixed assets include property, plant and equipment, goodwill, trademarks and other intangible assets
as well as long-term financial assets. Additions of € 775 million were primarily related to our own-retail
activities, investments into the Group’s logistics and IT infrastructure, the acquisition of Runtastic as
well as the further development of the Group’s headquarters in Herzogenaurach. Currency translation
effects of € 279 million also contributed to the increase in fixed assets. Additions and positive currency
translation effects were partly offset by depreciation and amortisation of € 358 million, goodwill impairment
of € 34 million and disposals of € 22 million. At the end of December 2015, other non-current financial see Note 16, p. 211
assets grew to € 99 million from € 42 million at the end of 2014. This development was driven by fixed and
contingent promissory notes related to the divestiture of the Rockport business.
1 2011 restated according to IAS 8 in the 2012 consolidated financial statements. 1 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
1 2011 restated according to IAS 8 in the 2012 consolidated financial statements. 1 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
12 0
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Group Business Performance – Statement of Financial Position and Statement of Cash Flows
Total non-current liabilities decreased 4% to € 2.332 billion at the end of December 2015 from € 2.422 billion
in the prior year. Long-term borrowings decreased 8% to € 1.463 billion at the end of December 2015
from € 1.584 billion in the prior year. This development was mainly due to the reclassification of private see Note 18, p. 212
placements from long-term borrowings to short-term borrowings. Other non-current provisions grew
30% to € 50 million at the end of December 2015 versus € 38 million in 2014. This primarily related to
an increase in other operational provisions. Non-current accrued liabilities grew 48% to € 120 million at
the end of December 2015 from € 81 million in 2014, mainly due to an increase in accruals for personnel.
Other non-current liabilities increased 17% to € 40 million at the end of December 2015 from € 35 million see Note 25, p. 220
in 2014. Other non-current financial liabilities more than doubled to € 18 million at the end of December
2015 from € 9 million in 2014, mainly due to the earn-out components for Runtastic.
Shareholders’ equity increased 1% to € 5.666 billion at the end of December 2015 versus € 5.624 billion see Diagram 32
in 2014. The net income generated during the last twelve months as well as positive currency translation
effects of € 134 million were partly offset by the repurchase of treasury shares in an amount of € 301 million, see Note 26, p. 220
the dividend of € 303 million paid to shareholders for the 2014 financial year as well as a decrease in
hedging reserves of € 117 million. The Group’s equity ratio at the end of December 2015 decreased to
42.5% compared to 45.3% in the prior year.
1 2011 restated according to IAS 8 in the 2012 consolidated financial statements. 1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the
Rockport business.
2 2011 restated according to IAS 8 in the 2012 consolidated financial statements.
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INVESTMENT ANALYSIS
Capital expenditure is defined as the total cash expenditure for the purchase of tangible and intangible
assets (excluding acquisitions). Group capital expenditure decreased 7% to € 513 million in 2015 (2014:
€ 554 million). Capital expenditure in property, plant and equipment amounted to € 464 million and was
thus below the prior year level of € 504 million. The Group invested € 49 million in intangible assets,
representing a 2% decrease compared to the prior year (2014: € 50 million). Depreciation and amortisation
excluding impairment losses/reversal of impairment losses of tangible and intangible assets increased
10% to € 338 million in 2015 (2014: € 309 million).
The majority of the Group’s capital expenditure was related to the Group’s controlled space initiatives. see Diagram 35
Investments in new or remodelled own-retail and franchise stores as well as in shop-in-shop presentations
of our brands and products in our customers’ stores accounted for 45% of total capital expenditure
(2014: 36%). Expenditure for logistics and IT represented 21% and 11%, respectively (2014: 33% and 9%,
respectively). In addition, expenditure for administration represented 6% (2014: 7%), while 16% of total
capital expenditure was recorded for other initiatives (2014: 14%). From a regional perspective, the majority
of the Group’s capital expenditure was recorded at the Group’s headquarters in Herzogenaurach, Germany,
accounting for 45% (2014: 55%). In addition, capital expenditure in Greater China accounted for 15% (2014:
10%) of the Group’s capital expenditure, followed by Western Europe with 12% (2014: 6%), MEAA with 7%
(2014: 6%), North America and Latin America with 6% each (2014: 6% and 6%, respectively), Russia/CIS
with 3% (2014: 5%) and Japan with 2% (2014: 1%). Expenditure for Other Businesses accounted for 4% of see Diagram 34
total capital expenditure (2014: 4%).
LIQUIDITY ANALYSIS
In 2015, net cash generated from operating activities increased to € 1.090 billion (2014: € 701 million).
Net cash generated from continuing operating activities increased to € 1.086 billion (2014: € 694 million),
driven by a significant increase in income before taxes, partly offset by an increase in income taxes paid.
Net cash used in investing activities increased to € 591 million (2014: € 537 million). Net cash used in
continuing investing activities increased to € 584 million (2014: € 531 million), mainly as a result of the
2015 0.3
2014 0.1
2013 (0.2)
2012 (0.3)
2011 (0.1)
1 2015, 2014 and 2013 reflect continuing operations as a result of the divestiture of the
Rockport business.
12 2
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Group Business Performance – Statement of Financial Position and Statement of Cash Flows
acquisition of Runtastic, partly offset by proceeds from the divestiture of the Rockport business and lower
purchases of property, plant and equipment. The majority of investing activities in 2015 related to spending
for property, plant and equipment, such as investments in the furnishing and fitting of our own-retail
stores, investments in the Group’s logistics infrastructure and IT systems. Net cash used in financing
activities totalled € 691 million (2014: € 118 million), mainly related to the dividend paid to shareholders
of € 303 million as well as the repurchase of treasury shares in the amount of € 301 million. Exchange see Diagram 37
rate effects negatively impacted the Group’s cash position by € 126 million in 2015 (2014: positive impact of
€ 50 million). As a result of all these developments, cash and cash equivalents decreased by € 318 million see Treasury, p. 124
to € 1.365 billion at the end of December 2015 compared to € 1.683 billion at the end of December 2014. Net see Glossary, p. 260
borrowings at December 31, 2015 amounted to € 460 million, compared to net borrowings of € 185 million
in 2014, representing an increase of € 275 million. This development is mainly a result of the utilisation of
cash for the share buyback programme in an amount of € 301 million. The Group’s ratio of net borrowings
over EBITDA amounted to 0.3 at the end of December 2015 (2014: 0.1). see Diagram 36
Operating cash flow, as described in the Internal Group Management System, increased 17% to € 620 million s ee Internal Group
in 2015 from € 530 million in 2014, mainly due to a higher operating profit. Management System, p. 102
Cash and cash equivalents Net cash generated Net cash used in Net cash used in Effect of exchange Cash and cash equivalents
at the end of from operating investing activities financing activities rates at the end of
2014 activities 2015
1,090
(591)
1,683
1,365
(691)
(126)
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Group Business Performance – Treasury
TREASURY
1 24
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Group M anagement Report – F inancial Review
Group Business Performance – Treasury
2015 2014
■ 2014 ■ 2015
2015 2014
■ 2014 ■ 2015
125
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Group M anagement Report – F inancial Review
Group Business Performance – Treasury
2015 2014
■ 2014 ■ 2015
126
3
Group M anagement Report – F inancial Review
Group Business Performance – Treasury
2015 2014
■ 2014 ■ 2015
2015 2014
■ 2014 ■ 2015
127
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Group Business Performance – Treasury
2015 2014
2015 (460)
2014 (185)
2013 295
2012 448
2011 90
46 FINANCIAL LEVERAGE IN %
2015 8.1
2014 3.3
2013 (5.4)
2012 (8.5)
2011 (1.7)
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Group Business Performance – Treasury
2015 2.4
2014 3.1
2013 3.8
2012 4.4
2011 4.9
12 9
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Group M anagement Report – F inancial Review
Group Business Performance – Financial Statements and Management Report of adidas AG
adidas AG is the parent company of the adidas Group. It includes operating business functions, primarily
for the German market, as well as corporate headquarter functions such as Marketing, Group Treasury,
Taxes, Legal and Finance. It also administers the shareholdings of the company.
In addition to its own trading activities, the results of adidas AG are also influenced by its holding function
for the adidas Group. This is reflected primarily in currency effects, transfer of costs for services provided,
interest result and income from investments in affiliated companies.
s ee Subsequent Events and
Outlook, p. 148
The opportunities and risks as well as the future development of adidas AG largely reflect those of the see Risk and Opportunity
adidas Group. Report, p. 156
The asset and capital structure of adidas AG is also impacted by its holding and financing function for
the Group. For example, 56% of total assets in 2015 related to financial assets, which primarily consist
of shares in affiliated companies. Intercompany accounts, through which transactions between affiliated
companies are settled, represent another 27% of total assets and 44% of total liabilities and equity as at
December 31, 2015.
PREPARATION OF ACCOUNTS
Unlike the consolidated financial statements of the adidas Group, which are in conformity with
the International Financial Reporting Standards (IFRS), as adopted by the European Union as at
December 31, 2015, the following financial statements of adidas AG have been prepared in accordance
with the rules set out in the German Commercial Code (Handelsgesetzbuch – HGB).
INCOME STATEMENT
2015 2014
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Group Business Performance – Financial Statements and Management Report of adidas AG
2015 2014
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Group Business Performance – Financial Statements and Management Report of adidas AG
Net interest expense of adidas AG rose 28% to € 56 million in 2015 (2014: € 44 million). This development
was mainly attributable to higher interest expenses from long-term liabilities towards third parties.
BALANCE SHEET
Assets
Intangible assets 118 129
Property, plant and equipment 449 419
Financial assets 4,216 3,503
Fixed assets 4,783 4,051
Inventories 48 38
Receivables and other assets 2,157 2,312
Cash and cash equivalents, securities 447 934
Current assets 2,652 3,284
Prepaid expenses 82 80
Total assets 7,517 7,415
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Group Business Performance – Financial Statements and Management Report of adidas AG
TOTAL ASSETS UP 1%
At the end of December 2015, total assets grew 1% to € 7.517 billion versus € 7.415 billion in the prior year. see Table 50
The increase in financial assets was largely offset by the decrease in current assets.
adidas AG has bilateral credit lines of € 1.7 billion. In addition, the company has a multi-currency commercial
paper programme in an amount of € 2.0 billion.
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Group M anagement Report – F inancial Review
Group Business Performance – Disclosures pursuant to § 315 Section 4 and § 289 Section 4 of the German Commercial Code
In the USA, we have issued American Depositary Receipts (ADRs). ADRs are deposit certificates of non-US
shares that are traded instead of the original shares on US stock exchanges. Two ADRs equal one share. see Our Share, p. 46
In addition, restrictions of voting rights may exist pursuant, inter alia, to § 136 AktG or for treasury shares
pursuant to § 71b AktG as well as due to capital market regulations, in particular pursuant to §§ 21 et seq.
German Securities Trading Act (Wertpapierhandelsgesetz – WpHG).
The Supervisory Board may revoke the appointment of an individual as member of the Executive Board or
CEO for good cause, such as gross negligence of duties or a vote of no confidence by the Annual General
Meeting.
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Group Business Performance – Disclosures pursuant to § 315 Section 4 and § 289 Section 4 of the German Commercial Code
Furthermore, the competent court shall, in urgent cases, make the necessary appointment upon
application by any party involved, if the Executive Board does not have the required number of members
(§ 85 section 1 AktG).
Authorised Capital
•• Until June 2, 2018, the Executive Board is authorised to increase the nominal capital, subject to
Supervisory Board approval, by issuing new shares against contributions in kind once or several times
by no more than € 25,000,000 altogether (Authorised Capital 2015).
•• Until June 30, 2018, the Executive Board is authorised to increase the nominal capital, subject to
Supervisory Board approval, by issuing new shares against contributions in cash once or several times
by no more than € 50,000,000 altogether (Authorised Capital 2013/I).
•• Until June 30, 2018, the Executive Board is authorised to increase the nominal capital, subject to
Supervisory Board approval, by issuing new shares against contributions in cash once or several times
by no more than € 20,000,000 altogether (Authorised Capital 2013/III).
Subject to Supervisory Board approval, shareholders’ subscription rights may be excluded in certain cases
for each of the above-mentioned authorisations. see Note 26, p. 220
Contingent Capital
•• The nominal capital of the company is conditionally increased by up to € 36,000,000 (Contingent Capital
2010). The Contingent Capital serves the purpose of granting holders or creditors of bonds that were
issued up to May 5, 2015 based on the resolution of the Annual General Meeting on May 6, 2010
subscription or conversion rights relating to no more than a total of 36,000,000 shares in compliance
with the corresponding conditions of the bonds.
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Group Business Performance – Disclosures pursuant to § 315 Section 4 and § 289 Section 4 of the German Commercial Code
On March 14, 2012, following the approval of the Supervisory Board, the Executive Board resolved to
make partial use of the authorisation granted by the Annual General Meeting on May 6, 2010 and issued a
convertible bond, excluding shareholders’ subscription rights, on March 21, 2012. However, the shares will
only be issued insofar as bondholders make use of their conversion rights. The total number of shares to
be issued to bondholders in case of full conversion currently amounts to up to 6,097,243 shares.
Moreover, the authorisation to issue bonds with warrants and/or convertible bonds granted on May 6, 2010
was cancelled by resolution of the Annual General Meeting on May 8, 2014.
The Executive Board has so far not utilised the authorisation to issue bonds with warrants and/or convertible
bonds granted by the Annual General Meeting on May 8, 2014.
•• Until May 7, 2019, the Executive Board is authorised to repurchase adidas AG shares of up to an amount
totalling 10% of the nominal capital at the date of the resolution (or, as the case may be, a lower amount
of nominal capital at the date of utilisation of the authorisation) for any lawful purpose and within the legal
framework. The authorisation may be used by the company but also by its subordinated Group companies
or by third parties on account of the company or its subordinated Group companies or third parties assigned
by the company or one of its subordinated Group companies.
The repurchase will be carried out via the stock exchange, through a public invitation to submit sale offers,
through a public repurchase offer, or through granting tender rights to shareholders. Furthermore, the
authorisation sets out the lowest and highest nominal value that may be granted in each case.
The purposes for which adidas AG shares repurchased based on this authorisation may be used are set out
in the resolution on Item 8 of the Agenda for the Annual General Meeting held on May 8, 2014. The shares
may in particular be used as follows:
•• They may be sold via the stock exchange, through a public share purchase offer made to all shareholders
or sold otherwise against cash (limited to 10% of the nominal capital taking into account certain offsets)
at a price not significantly below the stock market price of shares with the same features.
•• They may be offered and assigned as consideration for the direct or indirect acquisition of companies,
parts of companies, participations in companies or other economic assets or within the scope of
company mergers.
13 6
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Group Business Performance – Disclosures pursuant to § 315 Section 4 and § 289 Section 4 of the German Commercial Code
•• They may be offered and sold as consideration for the acquisition of industrial property rights or intan-
gible property rights or for the acquisition of licences relating to such rights, also through subordinated
Group companies.
•• They may be used for purposes of meeting the subscription or conversion rights or obligations or the
company’s right to delivery of shares arising from bonds with warrants and/or convertible bonds issued
by the company or its subordinated Group companies.
•• They may be cancelled without the cancellation, or the execution thereof, requiring an additional
resolution of the Annual General Meeting.
Furthermore, the shares may be assigned to members of the Executive Board as compensation by way of
a stock bonus subject to the provision that resale by the Executive Board members shall only be permitted
following a retention period of at least three years from the date of assignment. Responsibility in this case
lies with the Supervisory Board.
In case of utilisation of shares for the above-mentioned purposes, except for the cancellation of shares,
shareholders’ subscription rights are excluded.
The Supervisory Board may determine that transactions based on this authorisation may only be carried
out subject to the approval of the Supervisory Board or one of its committees.
In the year under review, the Executive Board partly utilised the authorisation to repurchase treasury see Note 26, p. 220
shares. In the period from March 6, 2015 up to and including June 15, 2015, adidas AG bought back 4,129,627
shares via the stock exchange.
•• In the scope of the authorisation resolved by the Annual General Meeting on May 8, 2014, the Executive
Board is furthermore authorised to conduct the share buyback also by using equity derivatives which are
arranged with a credit institution or financial services institution in close conformity with market conditions.
adidas AG may acquire call options issued for physical delivery and/or sell put options or use a combination
of call and put options or other equity derivatives if the option conditions ensure that these shares are only
delivered if they were purchased in compliance with the equality principle. All share purchases using the
aforementioned equity derivatives are limited to a maximum value of 5% of the nominal capital existing
at the date on which the resolution was adopted by the Annual General Meeting (or, as the case may be, a
lower amount of nominal capital at the date of utilisation of the authorisation). The term of the options may
not exceed 18 months and must furthermore be chosen in such a way that the shares are acquired upon
the exercise of the options no later than May 7, 2019. The authorisation furthermore sets out the lowest
and highest nominal value that may be granted in each case.
For excluding subscription rights as well as for the use and cancellation of shares purchased using equity
derivatives, the general provisions adopted by the Annual General Meeting (set out above) are applicable
accordingly.
No compensation agreements exist between adidas AG and members of the Executive Board or employees
relating to the event of a takeover bid.
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Business Performance by Segment
BUSINESS PERFORMANCE
BY SEGMENT
The adidas Group has divided its operating activities into the following operating segments: Western
Europe, North America, Greater China, Russia/CIS, Latin America, Japan, Middle East, South Korea,
Southeast Asia/Pacific, TaylorMade-adidas Golf, Reebok-CCM Hockey, Runtastic and Other centrally
managed businesses. While the business segments Western Europe, North America, Greater China,
Russia/CIS, Latin America and Japan are reported separately, the markets Middle East, South Korea
and Southeast Asia/Pacific are combined to the segment MEAA (’Middle East, Africa and other Asian
markets’). Each market comprises all business activities in the wholesale and retail distribution
channels of the adidas and Reebok brands. The segmental results of TaylorMade-adidas Golf,
Reebok-CCM Hockey, Runtastic and Other centrally managed businesses, including brands such as
Y-3 and Five Ten, are aggregated under Other Businesses. Segmental operating expenses primarily
relate to expenditure for point-of-sale and marketing investments as well as expenditure for sales
force, logistics and administration.
(11%)
RUSSIA /
+ 5%
NORTH
+ 17% CIS
+ 18%
GREATER
WESTERN
AMERICA EUROPE CHINA
+ 14% (0%)
JAPAN
MEAA
+ 12%
LATIN
AMERICA
(3%)
OTHER
BUSINESSES
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Business Performance by Segment – Western Europe
WESTERN EUROPE
adidas revenues in Western Europe grew 18% on a currency-neutral basis in 2015. This development was
driven by double-digit sales growth in the football category as well as at adidas Originals and adidas neo.
In addition, growth in the running and outdoor categories also contributed to the sales increase. Currency
translation effects had a positive impact on revenues in euro terms. adidas sales in Western Europe
increased 20% to € 4.193 billion (2014: € 3.485 billion).
Reebok revenues in Western Europe were up 11% on a currency-neutral basis in 2015. This increase was
mainly due to double-digit sales growth in the training and studio categories. In addition, high-single-
digit growth in the running category and mid-single-digit increases in Classics also contributed to the
development. Currency translation effects had a positive impact on revenues in euro terms. Reebok sales
in Western Europe were up 12% to € 347 million from € 308 million in the prior year.
Operating expenses were up 18% to € 1.248 billion versus € 1.055 billion in 2014. This development reflects
an increase in expenditure for point-of-sale and marketing investments as well as higher sales expenditure.
Operating expenses as a percentage of sales decreased 0.3 percentage points to 27.5% (2014: 27.8%).
Operating margin improved 2.5 percentage points to 20.0% (2014: 17.6%), as a result of the gross margin see Table 02
increase as well as the positive effect of lower operating expenses as a percentage of sales. Operating
profit in Western Europe increased 36% to € 909 million versus € 666 million in the prior year.
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Business Performance by Segment – North America
NORTH AMERICA
adidas revenues in North America grew 9% on a currency-neutral basis in 2015, reflecting double-digit
sales growth at adidas Originals and adidas neo as well as increases in the football and training categories.
Currency translation effects had a positive impact on revenues in euro terms. adidas sales in North America
increased 28% to € 2.231 billion (2014: € 1.739 billion).
Reebok revenues in North America decreased 7% on a currency-neutral basis in 2015, as sales growth in
the training and studio categories was more than offset by declines in the running and walking categories
as well as in Classics. This development also reflects the brand’s continued efforts to further streamline
Reebok’s factory outlet business in North America. Currency translation effects had a positive impact on
revenues in euro terms. Reebok sales in North America were up 9% to € 523 million from € 477 million
in the prior year.
Operating expenses were up 39% to € 977 million versus € 702 million in 2014. This reflects the planned
significant increase in expenditure for point-of-sale and marketing investments as well as sales expenditure
to support the company’s growth in the region. As a result, operating expenses as a percentage of sales
increased 3.8 percentage points to 35.5% (2014: 31.7%).
Operating margin decreased 2.9 percentage points to 2.5% (2014: 5.4%), as the positive effect from the gross see Table 03
margin increase was more than offset by higher operating expenses as a percentage of sales. Operating
profit in North America decreased 42% to € 69 million (2014: € 120 million).
14 0
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Group M anagement Report – F inancial Review
Business Performance by Segment – Greater China
GREATER CHINA
adidas revenues in Greater China grew 17% on a currency-neutral basis in 2015. The increase was mainly
due to double-digit sales growth in the training and running categories as well as at adidas Originals and
adidas neo. Currency translation effects had a positive impact on revenues in euro terms. adidas sales in
Greater China increased 37% to € 2.411 billion (2014: € 1.759 billion).
Reebok revenues in Greater China increased 83% on a currency-neutral basis in 2015, driven by significant
sales increases in the walking category and in Classics, where revenues more than doubled, as well as
strong double-digit sales growth in running. Currency translation effects had a positive impact on revenues
in euro terms. Reebok sales in Greater China more than doubled to € 58 million from € 27 million in the
prior year.
Operating expenses were up 36% to € 545 million versus € 402 million in 2014. This was due to an increase
in expenditure for point-of-sale and marketing investments as well as higher sales expenditure. Operating
expenses as a percentage of sales decreased 0.4 percentage points to 22.1% (2014: 22.5%).
Operating margin increased 0.5 percentage points to 35.1% (2014: 34.6%), as a result of the gross margin see Table 04
increase as well as the positive effect of lower operating expenses as a percentage of sales. Operating
profit in Greater China increased 40% to € 866 million versus € 617 million in the prior year.
1 41
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Group M anagement Report – F inancial Review
Business Performance by Segment – Russia/CIS
RUSSIA/CIS
adidas revenues decreased 13% on a currency-neutral basis in Russia/CIS in 2015. This development was
due to sales declines in most categories. Currency translation effects had a negative impact on revenues
in euro terms. adidas sales in Russia/CIS declined 35% to € 570 million (2014: € 872 million).
Reebok revenues in Russia/CIS decreased 1% on a currency-neutral basis in 2015. Sales growth in the
training and studio categories was more than offset by sales declines in the walking category. Currency
translation effects had a negative impact on revenues in euro terms. Reebok sales in Russia/CIS were
down 25% to € 170 million from € 226 million in the prior year.
Operating expenses were down 30% to € 329 million versus € 471 million in 2014. This was due to
significantly lower sales expenditure, reflecting the reduction in the number of stores. Operating expenses
as a percentage of sales increased 1.6 percentage points to 44.6% (2014: 42.9%).
Operating margin decreased 4.3 percentage points to 11.4% (2014: 15.7%), due to the gross margin decline see Table 05
as well as the negative effect of higher operating expenses as a percentage of sales. Operating profit in
Russia/CIS decreased 51% to € 85 million versus € 173 million in the prior year.
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Business Performance by Segment – Latin America
LATIN AMERICA
adidas revenues grew 11% on a currency-neutral basis in Latin America in 2015. This increase was
supported by double-digit sales increases in the training, basketball and outdoor categories as well as
at adidas Originals and adidas neo. In addition, mid-single-digit sales growth in the running category
contributed to this development. Currency translation effects had a negative impact on revenues in euro
terms. adidas sales in Latin America increased 9% to € 1.516 billion (2014: € 1.389 billion).
Reebok revenues in Latin America increased 16% on a currency-neutral basis in 2015, driven by double-
digit sales growth in the running, training and walking categories. In addition, mid-single-digit sales growth
in Classics also contributed to this development. Currency translation effects had a positive impact on
revenues in euro terms. Reebok sales in Latin America were up 19% to € 266 million from € 223 million
in the prior year.
Operating expenses were up 16% to € 521 million versus € 450 million in 2014. This was primarily due to
higher sales expenditure as well as an increase in expenditure for point-of-sale and marketing investments.
Operating expenses as a percentage of sales increased 1.3 percentage points to 29.2% (2014: 27.9%).
Operating margin increased 0.8 percentage points to 13.2% (2014: 12.3%), due to the increase in gross see Table 06
margin, partly offset by the negative effect of higher operating expenses as a percentage of sales. Operating
profit in Latin America increased 18% to € 235 million versus € 199 million in the prior year.
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Business Performance by Segment – Japan
JAPAN
adidas revenues remained stable on a currency-neutral basis in Japan in 2015. Double-digit growth at
adidas Originals as well as high-single-digit increases in the running category were offset by declines in
the training and football categories, the latter being mainly due to the non-recurrence of sales related to
the 2014 FIFA World Cup. Currency translation effects had a positive impact on revenues in euro terms.
adidas sales in Japan increased 4% to € 696 million (2014: € 667 million).
Reebok revenues in Japan decreased 1% on a currency-neutral basis in 2015. Strong sales growth in the
running category, where revenues more than doubled, as well as in Classics was more than offset by sales
declines in the walking category. Currency translation effects had a positive impact on revenues in euro
terms. Reebok sales in Japan were up 3% to € 80 million from € 77 million in the prior year.
Operating expenses were up 7% to € 231 million versus € 217 million in 2014, as a result of higher sales
expenditure as well as an increase in expenditure for point-of-sale and marketing investments. Operating
expenses as a percentage of sales increased 0.7 percentage points to 29.8% (2014: 29.1%).
Operating margin improved 2.8 percentage points to 19.0% (2014: 16.2%) as a result of the gross margin see Table 07
increase, partly offset by the negative effect of higher operating expenses as a percentage of sales. Operating
profit in Japan increased 22% to € 147 million versus € 121 million in the prior year.
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Business Performance by Segment – MEAA (Middle East, Africa and other Asian markets)
adidas revenues in MEAA grew 13% on a currency-neutral basis in 2015. This development was mainly due to
double-digit sales increases in the training and running categories as well as at adidas Originals. Currency
translation effects had a positive impact on revenues in euro terms. adidas sales in MEAA increased 23%
to € 2.091 billion (2014: € 1.693 billion).
Reebok revenues in MEAA increased 15% on a currency-neutral basis in 2015, driven by double-digit sales
growth in the training, running and studio categories as well as in Classics. Currency translation effects
had a positive impact on revenues in euro terms. Reebok sales in MEAA were up 28% to € 298 million from
€ 232 million in the prior year.
Operating expenses were up 28% to € 565 million versus € 442 million in 2014. This was due to higher sales
expenditure as well as an increase in expenditure for point-of-sale and marketing investments. Operating
expenses as a percentage of sales increased 0.7 percentage points to 23.7% (2014: 22.9%).
Operating margin decreased 1.0 percentage points to 27.8% (2014: 28.8%), due to the gross margin decline see Table 08
as well as the negative effect from higher operating expenses as a percentage of sales. Operating profit in
MEAA increased 20% to € 664 million versus € 555 million in the prior year.
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Business Performance by Segment – Other Businesses
OTHER BUSINESSES
TaylorMade-adidas Golf revenues declined 13% on a currency-neutral basis in 2015. This development was
due to sales decreases in most categories, in particular metalwoods and irons. Currency translation effects
positively impacted TaylorMade-adidas Golf sales in euro terms. Revenues decreased 1% to € 902 million
from € 913 million in the prior year.
Currency-neutral Reebok-CCM Hockey sales were up 8%. This increase was mainly due to strong sales
growth in key categories such as skates and protective equipment. In addition, double-digit increases in
apparel contributed to this development. Currency translation effects positively impacted sales in euro
terms. Reebok-CCM Hockey revenues increased 18% to € 317 million in 2015 from € 269 million in 2014.
Other centrally managed businesses revenues increased 35% on a currency-neutral basis, mainly as a
result of double-digit sales growth at Y-3 and Five Ten. Currency translation effects had a positive impact
on sales in euro terms. Revenues in Other centrally managed businesses increased 38% to € 242 million
in 2015 (2014: € 175 million).
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Business Performance by Segment – Other Businesses
Operating expenses increased 11% to € 596 million from € 536 million in 2014, as a result of higher sales
expenditure as well as an increase in expenditure for point-of-sale and marketing investments. Operating
expenses as a percentage of sales increased 1.2 percentage points to 40.6% (2014: 39.5%).
In 2015, Other Businesses recorded an operating loss of € 89 million (2014: operating loss of € 57 million). see Table 09
This resulted in a negative operating margin of 6.1% compared to a negative operating margin of 4.2% in
2014. This development was a result of the gross margin decline as well as the negative effect of higher
operating expenses as a percentage of sales.
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Subsequent Events and Outlook
SUBSEQUENT EVENTS
AND OUTLOOK
In 2016, despite ongoing uncertainties regarding the economic outlook in the emerging economies,
in particular China, we expect the global economy and consumer spending to grow, providing a
positive backdrop for the continued growth and expansion of the sporting goods industry. Through
our extensive pipeline of new and innovative products, increased brand-building activities and the
positive effects from major sporting events, including the UEFA EURO 2016, we project significant
top- and bottom-line improvements in our Group’s financial results in 2016. We forecast adidas Group
sales to increase at a rate between 10% and 12% on a currency-neutral basis, driven by the strong
momentum at both adidas and Reebok, with growth expected across nearly all market segments.
While less favourable hedging rates and higher input costs are projected to weigh on the Group’s
gross margin development in 2016, these negative effects will be largely compensated by the positive
effects from price increases as well as improvements in the channel, regional and product mix. As
a result, Group gross margin is forecasted to be at a level between 47.3% and 47.8%. Nevertheless,
Group operating margin excluding goodwill impairment is expected to be at least stable compared
to the prior year level of 6.5%, due to lower other operating expenses as a percentage of sales. As a
result, we project net income from continuing operations excluding goodwill impairment to increase
at a rate between 10% and 12% to a level of around € 800 million.
SUBSEQUENT EVENTS
OUTLOOK
FORWARD-LOOKING STATEMENTS
This Management Report contains forward-looking statements that reflect Management’s current view
with respect to the future development of the adidas Group. The outlook is based on estimates that we
have made on the basis of all the information available to us at this point in time. In addition, such forward-
looking statements are subject to uncertainties which are beyond the control of the adidas Group. In case s ee Risk and Opportunity
the underlying assumptions turn out to be incorrect or described risks or opportunities materialise, actual Report, p. 156
results and developments may materially deviate (negatively or positively) from those expressed by such
statements. The adidas Group does not assume any obligation to update any forward-looking statements
made in this Management Report beyond statutory disclosure obligations.
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In Western Europe, the region’s recovery is expected to continue, supported by lower energy and oil prices
fuelling domestic demand. In addition, further accommodative monetary easing by the ECB is predicted to
support economic activity, gradually lifting inflation from current low levels. Moreover, low interest rates
are expected to spur private consumption and further support household borrowing. However, slow wage
growth as well as high unemployment rates and public debt in a number of countries across the region are
expected to slow down the region’s recovery. As a result, the region’s GDP is expected to expand at a rate
of 1.4%. In Germany, the economy is projected to grow 1.5% in 2016, with buoyant domestic and private
consumer demand as well as robust labour markets and increased government spending prevailing as
the major drivers of growth.
European emerging markets are expected to grow at a moderate rate of 1.2% in 2016, as persistent
geopolitical tensions and uncertainties will weigh on investment and consumer spending. In addition,
adverse currency movements, high inflationary pressures and weak oil prices will negatively impact
domestic demand. In particular, Russia’s economy is forecasted to contract 0.8% this year, as sluggish
business sentiment, weak domestic demand and a tight fiscal policy will continue to weigh on the country’s
economy.
In the USA, despite higher inflationary pressures, consumer spending and domestic demand are projected to
remain the major source of growth, supported by low unemployment rates as well as declining energy and
oil prices. However, the strong US dollar will continue to weigh on exports. The Federal Reserve is expected
to continue to gradually lift interest rates. As a result, the US economy is forecasted to grow at 2.2% in 2016.
Asia’s GDP is projected to increase 5.1% in 2016. With the exception of Japan, growth is expected to
remain relatively high during the year, supported by healthy industrial activity, weak oil prices, declining
inflationary pressures and significant wage increases, which should bolster consumer spending. While
concerns regarding a slowdown in the Chinese economy grew throughout the past year, the nation’s GDP
is still forecasted to expand by 6.7% in 2016, fuelled by accommodative fiscal and monetary policies, low oil
prices as well as robust private consumption. However, export growth is forecasted to weaken, weighing
on industrial production and investment growth. Japan is predicted to show signs of economic recovery
and grow 1.2%, supported by private consumption, low inflationary pressures, wage and export growth as
well as accommodative monetary policies. In India, GDP is expected to expand by 7.8%, fuelled by strong
private domestic demand, strengthened investment, low commodity prices and growing consumer and
government spending.
In Latin America, GDP is expected to increase 0.4% in 2016. Growth in several countries is forecasted
to compensate for Brazil’s deepened recession, where political instability, muted consumer confidence,
high inflationary pressures and rising unemployment are expected to weigh on domestic demand and to
dampen the country’s economic activity. In contrast, Mexico and Colombia are projected to record GDP
growth in 2016, due to improving domestic demand and export growth. In Argentina, higher inflation as
well as sluggish export growth are forecasted to slow down the country’s economic activity.
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Subsequent Events and Outlook
In Western Europe, lower energy and oil prices should positively impact domestic demand and consumer
spending in the sporting goods industry. The region’s industry, and in particular the football category, is
expected to gain momentum due to the UEFA EURO 2016, which is hosted by France. In the European
emerging markets, high inflationary pressures together with low oil prices and the geopolitical tensions
in Russia and Ukraine provide additional potential risk of depressing sentiment and economic activity,
which is expected to negatively impact private consumption and growth in the sporting goods industry.
In the USA, industry growth rates are expected to be ahead of the economy’s overall growth. E-commerce
channels are forecasted to remain strong and move even further towards the mobile environment. The trend
towards social fitness is set to continue, with class-based fitness activities and other shared experiences
gaining significant traction. Casual and retro silhouettes are projected to remain strong across a variety of
categories, including running. The US golf market is expected to remain challenging and will most likely
continue to face structural challenges.
In Greater China, declining inflationary pressures, strong wage growth and domestic consumption are
predicted to propel the sporting goods industry in 2016. In addition, rising sports participation, strongly
supported by the Chinese government, is projected to continue to boost sportswear demand. In Japan, the
government’s stimulus programmes are forecasted to positively impact consumer sentiment and spending,
despite subdued wage growth. Most of the other Asian markets, especially India, are projected to see robust
sporting goods sales growth in 2016.
In Latin America, the sporting goods industry is forecasted to grow modestly in 2016, mainly benefiting from
the Olympic Games, which are being hosted by Brazil. However, headwinds from high inflation, weakness
in labour market conditions as well as low commodity prices are expected to have negative implications
for consumer spending in the region’s largest economies, e.g. Brazil and Argentina, which will slow down
the industry’s overall growth.
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Subsequent Events and Outlook
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Product Brand
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Risk and Opportunity Report
To facilitate effective risk and opportunity management, we implemented an integrated risk and opportunity
management system, which is based on the integrated frameworks for enterprise risk management and
internal controls developed and published by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Additionally, it has been adapted to more appropriately reflect the structure as well as
company and management culture of the adidas Group. This system focuses on the identification, evaluation,
handling, monitoring and reporting of risks and opportunities. The key objective of the risk and opportunity
management system is to support business success and protect the company as a going concern through
an opportunity-focused but risk-aware decision-making framework. Our Group Risk Management Policy,
which is available on our intranet, outlines the principles, processes, tools, risk areas, key responsibilities,
reporting requirements and communication timelines within our Group.
Risk and opportunity management is a Group-wide activity which utilises critical day-to-day management
insight from both global and local business units and functions.
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Risk and Opportunity Report
Our risk and opportunity management process contains the following components:
• Risk and opportunity identification: The adidas Group continuously monitors the macroeconomic
environment and developments in the sporting goods industry, as well as internal processes, to identify
risks and opportunities as early as possible. Our Group-wide network of Risk Owners (i.e. all direct reports
to the adidas AG Executive Board, including the Managing Directors of all our markets) ensures effective
identification of risks and opportunities. The Group Risk Management department has defined a catalogue
of potential risk areas (Risk Universe) to assist Risk Owners in identifying and categorising risks and
opportunities.
The Risk Owners use various instruments in the risk and opportunity identification process, such as primary
qualitative and quantitative research including trend scouting and consumer surveys as well as feedback
from our business partners and controlled space network. These efforts are supported by global market
research and competitor analysis. Through this process, we seek to identify the markets, categories,
consumer target groups and product styles which show most potential for future growth at a local and global
level. Equally, our analysis focuses on those areas that are at risk of saturation or exposed to increased
competition or changing consumer tastes. However, our risk and opportunity identification process is not
only limited to external risk factors or opportunities; it also includes an internal perspective that considers
processes, projects, human resources and compliance aspects.
• Risk and opportunity evaluation: We evaluate identified risks and opportunities individually according
to a systematic evaluation methodology, which allows adequate prioritisation as well as allocation of
resources. Risk and opportunity evaluation is also part of the Risk Owners’ responsibility. The Group Risk
Management department supports and guides the Risk Owners in the evaluation process.
According to our methodology, risks and opportunities are evaluated by looking at two dimensions: the
potential impact and the likelihood that this impact materialises. Based on this evaluation, we classify risks
and opportunities into five categories: marginal, minor, moderate, significant and major.
Risk Owners
Evaluation Identification
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The potential impact is evaluated by utilising five categories: marginal, minor, moderate, significant and see Table 02
major. These categories represent quantitative or equivalent qualitative measurements. The quantitative
measurements are based on the potential financial effect on the relevant income statement metrics
(operating profit, financial result or tax expenses). Qualitative measurements used are, for example, the
degree of media exposure or additional senior management attention needed. Likelihood represents
the possibility that a given risk or opportunity may materialise with the specific impact. The likelihood of
individual risks and opportunities is evaluated on a percentage scale divided into five categories: unlikely,
possible, likely, probable and highly probable.
When evaluating risks and opportunities, we also consider the earliest time period when the Group’s target
achievement may be impacted, in order to provide a broad perspective and ensure early identification
and mitigation. Short-term risks and opportunities may affect the achievement of the Group’s objectives
already in the current financial year, mid-term risks and opportunities would impact the Group’s target
achievement in the next financial year, while long-term risks and opportunities might only have an effect
on the achievement of the Group’s objectives after the next financial year.
We consider both gross and net risks in our risk assessments. While the gross risk reflects the inherent
(‘worst-case’) risk before any mitigating action, the net risk reflects the residual (‘expected’) risk after
all mitigating action. On the one hand, this approach allows for a good understanding of the impact of
mitigating action taken, and on the other hand it provides the basis for scenario analysis. Our assessment
of risks presented in this report only reflects the net risk perspective. We measure the actual financial
impact of high-level risks that materialised against the original assessment on a yearly basis. In this way,
we ensure continuous monitoring of the accuracy of risk evaluations across the Group, which enables us
to continuously improve evaluation methodology based on our findings.
Probable 50% – 85%
Likelihood
Likely 30% – 50%
Possible 15% – 30%
Unlikely < 15%
Qualitative Almost no media Limited local media Local and limited National and limited Extensive international
equivalent coverage coverage national media coverage international media media coverage
coverage
Almost no senior Less than 5% additional 5% – 10% additional 10% – 20% additional Over 20% additional
management attention senior management senior management senior management senior management
attention attention attention attention
Potential impact
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In assessing the potential effect from opportunities, each opportunity is appraised with respect to viability,
commerciality and potential risks. This approach is applied to longer-term strategic prospects but also to
shorter-term tactical and opportunistic initiatives at the Group level as well as at the market and brand
level. In contrast to the risk evaluation, only the net perspective exists for assessing opportunities.
• Risk and opportunity handling: Risks and opportunities are treated in accordance with the Group’s
risk and opportunity management principles as described in the Group Risk Management Policy. Risk
Owners are in charge of developing and implementing appropriate risk-mitigating action and exploiting
opportunities within their area of responsibility. In addition, the Risk Owners need to determine a general
risk-handling strategy for the identified risks, which is either risk avoidance, risk reduction with the objective
to minimise impact and/or likelihood, risk transfer to a third party or risk acceptance. The decision on the
implementation of the respective risk-handling strategy also takes into account the costs in relation to
the effectiveness of any planned mitigating action if applicable. The Group Risk Management department
works closely with the Risk Owners to monitor the continuous progress of planned mitigating action and
assess the viability of already implemented mitigating action.
• Risk and opportunity monitoring and reporting: Our integrated risk and opportunity management
system aims to increase the transparency of Group risks and opportunities. As both risks and opportunities
are subject to constant change, Risk Owners not only monitor developments but also the adequacy and
effectiveness of the current risk handling strategy on an ongoing basis.
Regular risk reporting consists of a two-step reporting stream supported and facilitated by a globally used
Group-wide IT solution. Firstly, on a quarterly basis, Risk Owners are required to report to Group Risk
Management risks with a possible gross impact rating of at least moderate or a net impact rating of at
least minor, both regardless of the likelihood of materialising. Risk Owners are also required to report all
opportunities with an impact rating of at least minor. Secondly, Group Risk Management aggregates the
reported risks and opportunities and, also on a quarterly basis, provides a consolidated Group-wide report
based on the Risk Owners’ input, which specifically highlights substantial individual risks and opportunities
as well as, on an aggregated level, key areas of risk and opportunity.
Material changes in previously reported risks and/or newly identified risks with a potential net impact of at
least moderate, and any issues identified which due to their material nature require immediate reporting to
the Executive Board, are also reported outside the regular quarterly reporting stream on an ad hoc basis.
The adidas Group Fair Play Compliance Framework and our risk and opportunity management system
are closely aligned and both are overseen by the Group’s Chief Compliance Officer who reports directly
to the Group’s Chief Executive Officer. We see compliance as all-encompassing, spanning all business
functions throughout the entire value chain, from supply chain through to the end consumer. As a result,
the identification, analysis and evaluation of potential compliance risks are essential for our risk and
opportunity management process. The Group Risk Management department works closely with the Risk
Owners and responsible Compliance Officers to conduct a systematic assessment of key compliance risks
on a quarterly basis. In addition, the Group Compliance department regularly conducts detailed compliance
risk assessments within selected Group entities.
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The Group’s compliance management system is based on the OECD Principles of Corporate Governance.
It refers to the OECD Guidelines for Multinational Enterprises and is designed to:
•• Support the achievement of qualitative and sustainable growth through good corporate governance
practice.
•• Reduce and mitigate the risk of financial losses or damage caused by non-compliant conduct.
•• Protect and further enhance the value and reputation of the Group and its brands through compliant
conduct.
•• Preserve diversity by fighting harassment and discrimination.
Our Fair Play Code of Conduct, which is applicable globally and for all business areas, stipulates guidelines
for behaviour in everyday work and is available both on our website and on our intranet. The Code of
Conduct is the cornerstone of our compliance management programme which is founded on three pillars:
prevention, detection and response.
Prevention includes, for example, policies such as the Group’s Code of Conduct, the Group’s anti-bribery
and corruption policy or the Group’s privacy policy, training of employees or targeted compliance-related
communication by management or the Group Compliance department. In 2015, approximately 13,000
employees participated in our web-based Code of Conduct training, while around 14,000 employees
completed our web-based anti-bribery and corruption training.
To ensure timely detection of potential infringements of statutory regulations or internal guidelines, we have
implemented whistleblowing procedures which allow employees to either report concerns over wrongdoing/
potential compliance violations internally (e.g. directly to their supervisor, to the Chief Compliance Officer or
other Compliance Officers, the relevant HR manager or the Works Council) or externally via an independent,
confidential reporting hotline or email service. The hotline (named ‘Fair Play hotline’) is available at all
times and can be called free of charge in over 60 countries worldwide. In case of reported or suspected
compliance violations, the Chief Compliance Officer or the Group Compliance department undertake the
required investigations.
Appropriate and timely response to compliance violations is essential. Therefore, we have established a
global network of local Compliance Officers reporting directly to the Chief Compliance Officer of the Group
as contact persons to whom complaints and information concerning compliance violations can be reported.
We track, monitor and report potential incidents of non-compliance worldwide using a web-based reporting
solution which can be accessed by all Compliance Officers across the Group, our internal investigators and
the external operator of our Fair Play hotline. The Group Compliance department manages this web-based
reporting solution. In 2015, we recorded around 300 potential compliance violations. Appropriate sanction
mechanisms (ranging from warnings through to termination of employment) are used to react promptly
to compliance violations. Insights gained from the investigation of past violations are used to continuously
improve the compliance management system.
The Chief Compliance Officer regularly reports to the Executive Board on the further development of the
compliance programme and on major compliance cases, which are also reported to the Audit Committee.
Further, he reports to the Audit Committee at one of its meetings at least once a year concerning the
contents and the further development of the compliance programme.
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Taxes, Treasury, Planning, Reporting and Legal, focusing on the identification, assessment, treatment,
monitoring and reporting of financial reporting risks. Clearly defined responsibilities are assigned to each
distinct sub-process. In a first step, the internal control and risk management system serves to identify
and assess as well as to limit and control risks identified in the consolidated financial reporting process
which might result in our consolidated financial statements not being in conformity with internal and
external regulations.
Internal Control over Financial Reporting (ICoFR) serves to provide reasonable assurance regarding the
reliability of reporting and compliance with applicable laws and regulations despite identified financial
reporting risks. To monitor the effectiveness of ICoFR, the Group Policies & Internal Controls department
and the Group Internal Audit department regularly review accounting-related processes. Additionally, as
part of the year-end audit, the external auditor selects and examines internal controls, including IT controls,
to assess their effectiveness. The Audit Committee of the adidas AG Supervisory Board also monitors the
effectiveness of ICoFR. However, due to limitations of ICoFR, even with appropriate and functional systems
absolute certainty about the effectiveness of ICoFR cannot be guaranteed.
All Group companies are required to comply with the consolidated financial reporting policies (Group
Finance Manual), which are available to all employees involved in the financial reporting process through
the Group-wide intranet. We update the Group Finance Manual on a regular basis, dependent on regulatory
changes and internal developments. Changes to the Group Finance Manual are promptly communicated to
all Group companies. Clear policies serve to limit employees’ scope of discretion with regard to recognition
and valuation of assets and liabilities, thus reducing the risk of inconsistent accounting practices within
the Group. We aim to ensure compliance with the Group Finance Manual through continuous adherence
to the four-eyes principle in accounting-related processes. In addition, each quarter, the local manager
responsible for the accounting process within the respective Group company and the respective local
Managing Director confirm adherence to the Group Finance Manual and to IFRS in a signed representation
letter to Group Accounting.
The accounting for Group companies is conducted either locally or by an adidas Group Shared Service
Centre. Most of the IT ERP systems used are based on a Group-wide standardised SAP system. Some Group
companies use Navision-based ERP software. As part of an initiative aimed at harmonising our system
infrastructure (One ERP), we will also introduce an SAP-based ERP system within these Group companies
in the medium term. Following approval by the Finance Director of the respective Group company, the local
financial statements are transferred to a central consolidation system based on SAP SEM-BCS. At Group
level, the regularity and reliability of the financial statements prepared by Group companies are reviewed
by Group Accounting and Controlling. These measures include automated validations in the system as
well as the creation of reports and analyses to ensure data integrity and adherence to the reporting logic.
In addition, differences between current year and prior year financial data as well as budget figures are
analysed on a market level. If necessary, the Group seeks the opinion of independent experts to review
business transactions that occur infrequently and on a non-routine basis. After ensuring data plausibility,
the centrally coordinated and monitored consolidation process begins, running automatically on SAP
SEM-BCS. Controls within the individual consolidation steps, such as those relating to the consolidation
of debt or of income and expenses, are conducted both manually and system-based, using automatically
created consolidation logs. Any inadequacies are remedied manually by systematically processing the
individual errors as well as differences and are reported back to the Group companies. After finalisation of
all consolidation steps, all items in the consolidated income statement and in the consolidated statement
of financial position are analysed with respect to trends and variances. Unless already otherwise clarified,
the Group companies are asked to explain any identified material deviations.
All financial systems used are protected against malpractice by means of appropriate authorisation
concepts, approval concepts and access restrictions. Access authorisations are reviewed on a regular
basis and updated if required. The risk of data loss or outage of accounting-related IT systems is minimised
through central control and monitoring of virtually all IT systems, centralised management of change
processes and regular data backups.
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Risk and Opportunity Report – Illustration of Material Risks
This report includes an explanation of what we perceive as material risks to the achievement of the Group’s
objectives in 2016. As we adjusted the definition of materiality compared to 2015, material risks are now all
net risks classified as significant or major. Besides these material risks, we also report macroeconomic,
sociopolitical and regulatory risks as well as credit risks, interest rate risks, and financing and liquidity see Table 03
risks. The corporate risks overview table shows the assessment of all risks described below.
Strategic Risks
Risks related to organisational structure and change Major (Significant) Possible (Likely)
Risks related to distribution strategy Significant Likely
Competition risks Significant Possible (Likely)
Risks related to media and stakeholder activities Significant Possible (Likely)
Macroeconomic, sociopolitical and regulatory risks Major Unlikely (Possible)
Operational Risks
Personnel risks Major Possible
Business partner risks Significant (Major) Possible
IT risks Significant (Major) Possible (Unlikely)
Inventory risks Significant Possible (Likely)
Financial Risks
Currency risks Major Likely
Risks related to impairment of goodwill/other intangible assets Major Likely (Possible)
Credit risks Major Unlikely
Interest rate risks Minor Likely
Financing and liquidity risks Marginal (Minor) Likely (Unlikely)
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STRATEGIC RISKS
Risks related to organisational structure and change
Operating in a dynamic and fast-moving competitive environment, the Group needs to cope with constantly
changing requirements in respect of the workforce (e.g. regarding adaptability, learning, skillsets, mobility,
diversity) and workplace (e.g. regarding flexibility and space management). Therefore, organisational
flexibility and the ability to adapt quickly to new competitive circumstances are critical to remain successful.
A complex organisational structure and unclear roles and responsibilities across the Group can lead
to delayed or sub-optimal decision-making, inefficient and ineffective processes and, consequently,
higher costs. Improper planning and execution of reorganisation and transformation initiatives may
reduce employee engagement, cause business disruption and result in higher costs. A high frequency
in organisational changes could cause fatigue among the workforce and lead to reduced efficiency and
productivity. Inadequate change management could lead to non-acceptance of changes by the workforce,
lower employee engagement and inefficiencies. The HR function plays a key role in driving effective change
management.
We mitigate these risks through continuous, open and transparent communication with our employees.
Our Executive Board members as well as the senior management team across the Group hold regular
‘town hall’ meetings to update employees on organisational changes and openly explain the reasons for
change. To adequately manage change and to ensure clarity about roles and responsibilities throughout the
organisation, we also utilise internal and external experts in project management, change management and
communication, who actively educate and engage the workforce to embrace and support new organisational
structures and processes. To increase flexibility and adaptability of the workforce and workplace and thereby
reduce risks related to organisational change, we have kicked off the implementation of various mitigating
measures such as strategic workforce planning, tailored on-the-job learning programmes and development
plans for our employees, as well as the future workplace concept, which was introduced as part of a pilot see Our People, p. 87
programme at the Group’s headquarters in Herzogenaurach, Germany, in 2015.
To mitigate these risks, the Group has developed and implemented clearly defined distribution policies
and procedures to avoid over-distribution of products in a particular channel and limit the exposure to grey
markets. We continuously monitor our own-retail store portfolio, which helps us identify imbalances and
quickly take appropriate action such as store closure or remodelling. New store openings are managed
according to a standardised Group-wide business plan model, taking into account our many years of
own-retail experience and best practices from around the world. In addition, we conduct specific trainings
for our sales force to appropriately manage product distribution and ensure that the right product is sold
at the right point of sale to the right consumer at an adequate price.
Competition risks
Strategic alliances amongst competitors and/or retailers, the increase of retailers’ own private label
businesses and intense competition for consumers and promotion partnerships from well-established
industry peers and new market entrants (e.g. new brands, vertical retailers) pose a substantial risk to the
adidas Group. This could lead to harmful competitive behaviour, such as price wars in the marketplace
or bidding wars for promotion partnerships. Sustained pricing pressure in the Group’s key markets could
threaten the Group’s financial performance and the competitiveness of our brands. Aggressive competitive
practices could also drive increases in marketing costs and market share losses, thus hurting the Group’s
profitability and market position. World leaders in digital technologies could threaten the Group’s success
in markets for wearables or sport and fitness apps.
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To mitigate competition risks, we continuously monitor and analyse competitive and market information
in order to be able to anticipate unfavourable changes in the competitive environment rather than reacting
to such changes. This enables us to proactively adjust our marketing and sales activities when needed.
Continuous investment in research and development ensures we remain innovative and create a point
of difference from competitors. We also pursue a strategy of entering into long-term agreements with s ee Research and
key promotion partners such as FC Bayern Munich or Lionel Messi, as well as adding new partners to Development, p. 80
refresh and diversify our portfolio, e.g. Manchester United or James Harden. In addition, our product and
communication initiatives are designed to increase brand desire, drive market share growth and strengthen
our brands’ market position.
To mitigate these risks, we pursue proactive, open communication and engagement with key stakeholders
(e.g. consumers, media, non-governmental organisations, the financial community) on a continuous basis.
In addition, we have established clear crisis communication processes to ensure a quick and effective
response to adverse developments. We have also strengthened social media capabilities across the Group
and created various digital newsrooms worldwide that enable continuous monitoring of social media content
related to the Group’s products and activities and allow early management of potentially damaging social
media discussion. On a case-by-case basis, we seek external advice from experts in communication and
stakeholder management.
To mitigate these macroeconomic, sociopolitical and regulatory risks, the Group strives to balance sales
across key global regions and also between developed and emerging markets. We also continuously
monitor the macroeconomic, political and regulatory landscape in all our key markets to anticipate potential
problem areas, so that we are able to quickly adjust our business activities accordingly upon any change
in conditions. Potential adjustments may be a reallocation of investments to alternative, more attractive
markets, changes in product prices, closure of own-retail stores, more conservative product purchasing,
tight working capital management and an increased focus on cost control. In addition, by building on our
leading position within the sporting goods industry, we actively engage in supporting policymakers and
regulators to liberalise global trade, curtail trade barriers and proactively adapt to significant changes in
the regulatory environment.
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OPERATIONAL RISKS
Personnel risks
Achieving the adidas Group’s strategic and financial objectives is highly dependent on our employees
and their talents. In that respect, strong leadership and a performance-enhancing culture are critical
to our Group’s success. Therefore, inconsistent or ineffective leadership as well as the failure to instil
and maintain a performance-oriented culture and ensure strong employee engagement amongst our
workforce could also substantially impede our ability to achieve our goals. In addition, global competition
for highly qualified personnel remains fierce. As a result, the loss of key personnel in strategic positions
and the inability to identify, recruit and retain sufficient highly qualified and skilled people who best meet
the specific needs of our Group pose substantial risks to our Group’s business performance. Unattractive
or non-competitive management and employee remuneration may exacerbate these risks. In addition, a
lack of sufficient training measures and inadequate documentation of critical know-how might dilute or
lead to a loss of key capabilities.
Our People Strategy is designed to reduce these risks by creating the corporate culture and work
environment needed to be successful. We continuously invest in improving employer branding activities
to be the ‘employer of choice’ in our industry and as a result attract and retain the right talent. We have see Our People, p. 87
also established a global recruiting organisation to enhance our internal and external recruiting services
and capabilities. In addition, we strengthen employee retention by providing employees development and
career opportunities (e.g. via our Talent Carousel programme) and we focus on promoting from within the
organisation rather than recruiting externally. Attractive reward and incentive schemes are designed to
further support long-term employee commitment.
Injuries to individual athletes or poor on-field performance on the part of sponsored teams or athletes
could reduce their consumer appeal and eventually result in lower sales and attractiveness of our brands.
Failure to cement and maintain strong relationships with retailers could have substantial negative effects
on our wholesale activities and thus the Group’s business performance. Losing important customers in
key markets due to sub-par relationship management would result in significant sales shortfalls. In a few
individual markets, we work with distributors or strategic partners whose approach might differ from our
own distribution practices and standards, which could also negatively impact the adidas Group’s business
performance. Similarly, failure to maintain strong relationships with suppliers or service providers could
negatively impact the Group’s sales and profitability. Risks may also arise from a dependence on particular
suppliers, customers or service providers. Over-reliance on a supplier for a substantial portion of the
Group’s product volume, or over-dependence on a particular customer, increases the Group’s vulnerability
to delivery and sales shortfalls and could lead to significant margin pressure. Business partner default
or other disruptive events such as strikes may negatively affect the Group’s business activities and result
in additional costs and liabilities as well as lower sales for the Group. Unethical business practices or
improper behaviour on the part of business partners could have a negative spill-over effect on the Group’s
reputation, lead to higher costs or liabilities and disrupt business activities.
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To mitigate business partner risks, the Group has implemented various measures. For example, we
generally include clauses in contractual agreements with athletes, clubs, federations or other promotion
partners that allow us to suspend or even terminate our partnership in case of improper or unethical
conduct. In addition, we work with a broad portfolio of promotion partners, including individual athletes,
club teams, federations or associations in numerous sports to reduce the dependence on the success
and popularity of a few individual partners. To ensure strong relationships with retailers, the Group is
committed to delivering outstanding customer service and providing our retail partners with the support
and tools to establish and maintain a mutually successful business relationship. Customer relationship
management is not only a key activity for our sales force but also of highest importance to our Group’s top
executives and second-line management. We also utilise a broad distribution strategy which includes further
expanding our controlled space activities to reduce the risk of over-reliance on particular key customers.
Specifically, no single customer accounted for more than 10% of Group sales in 2015. To reduce the risk
of business interruption in the supply chain, we work with suppliers who demonstrate reliability, quality
and innovation. Furthermore, in order to minimise any potential negative consequences such as a violation
of our Workplace Standards by our suppliers, we enforce strict control and inspection procedures at our
suppliers and also demand adherence to social and environmental standards throughout our supply chain. see Sustainability, p. 94
In addition, we have selectively bought insurance coverage for the risk of business interruptions caused
by physical damage to suppliers’ premises. To reduce dependency on any particular supplier, the Group
follows a strategy of diversification. In this context, the Group works with a broad network of suppliers and,
for the vast majority of its products, does not have a single-sourcing model. see Glossary, p. 260
IT risks
Theft or leakage of confidential and sensitive information or data (e.g. product data, employee data, consumer
data) could lead to reputational damage, penalties and higher costs. Data leakage could trigger in-depth
forensic investigation resulting in temporary unavailability of key systems and business interruption. Key
business processes, including product marketing, order management, warehouse management, invoice
processing, customer support and financial reporting, are all dependent on IT systems. A significant systems
outage or application failure could therefore result in considerable disruptions to our business. Virus or
malware attacks could also lead to systems disruption and may result in the loss of business-critical and/
or confidential information.
To mitigate these risks, our IT organisation proactively engages in system preventive maintenance, service
continuity planning and adherence to applicable IT policies. Data security is managed by restricting user
access based on job description and adhering to data protection regulations. We conduct security reviews
of key systems and applications on a regular basis and have established monitoring and alert systems to
detect and properly tackle IT security incidents. Additional security measures such as anti-virus software
and firewalls are designed to further protect our systems and critical information. We perform multiple
backups at alternating data centre locations for the Group’s core Enterprise Resource Planning system
(ERP) on a daily basis. In addition, for the ERP system, our contingency solution allows us to quickly switch
to a remote site if necessary – without any loss of data. System security, controls and reliability are regularly
reviewed and tested by the Group’s Internal Audit department.
Inventory risks
As we place initial production orders up to nine months in advance of delivery, the adidas Group is exposed to
inventory risks relating to misjudging consumer demand at the time of production planning. Overestimating
demand could result in inappropriate capacity utilisation at our suppliers’ factories, lead to over-production
and cause excess inventory for the Group as well as in the marketplace. This can have negative implications
for our financial performance, including product returns, inventory obsolescence and higher levels of
clearance activity as well as reduced liquidity due to higher operating working capital requirements.
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Similarly, underestimating demand can lead to product shortfalls at the point of sale. In this situation,
the Group faces the risk of missed sales opportunities and/or customer and consumer disappointment,
which could lead to a reduction in brand loyalty and hurt our reputation as an On-Time In-Full supplier. In
addition, the Group faces potential profitability impacts from additional costs such as airfreight in efforts
to speed up replenishment.
In order to mitigate these risks, we actively manage inventory levels, for example by continuous monitoring
of stock levels as well as centralising stock holding and clearance activities. We also continuously strive s ee Internal Group Management
to improve our forecasting and material planning processes. Our integrated business planning process System, p. 102
ensures alignment of demand and supply planning on a monthly basis and thus facilitates inventory and
order book management. In addition, our Global Operations function is continuously improving the agility see Global Operations, p. 74
and flexibility of our planning environment in order to shorten order-to-delivery times and ensure availability
of products while trying to avoid excess inventories.
To proactively manage such risks, we constantly seek expert advice from specialised law or tax advisory
firms. We closely monitor changes in legislation in order to properly adopt regulatory requirements
regarding customs and taxes. In addition, our internal legal, customs or tax departments advise our
operational management teams to ensure appropriate and compliant business practices. Furthermore, we
work closely with customs authorities and governments worldwide to make sure we adhere to customs and
import regulations and obtain the required clearance of products to fulfil sales demand. In order to reduce
the financial risk, we also create provisions in our financial statements in accordance with the relevant
accounting regulations to account for potential disputes with customs or tax authorities.
FINANCIAL RISKS
Currency risks
Currency risks for the adidas Group are a direct result of multi-currency cash flows within the Group.
Furthermore, translation impacts from the conversion of non-euro-denominated results into our Group’s
functional currency, the euro, might lead to a material negative impact on our Group’s financial performance.
The biggest single driver behind this risk results from the mismatch of the currencies required for sourcing
our products versus the denominations of our sales. The vast majority of our sourcing expenses are in US
dollars, while sales are denominated in other currencies to a large extent – most notably the euro. Our main
exposures are presented in the table. The exposure from firm commitments and forecasted transactions see Table 04
was calculated on a one-year basis.
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In line with IFRS 7 requirements, we have calculated the impact on net income and shareholders’ equity
based on changes in our most important currency exchange rates. The calculated impacts mainly result
from changes in the fair value of our hedging instruments. The analysis does not include effects that arise
from the translation of our foreign entities’ financial statements into the Group’s reporting currency, the
euro. The sensitivity analysis is based on the net balance sheet exposure, including intercompany balances
from monetary assets and liabilities denominated in foreign currencies. Moreover, all outstanding currency
derivatives were re-evaluated using hypothetical foreign exchange rates to determine the effects on net
income and equity. The analysis was performed on the same basis for both 2014 and 2015.
Based on this analysis, a 10% increase in the euro versus the US dollar at December 31, 2015 would have
led to a € 7 million increase in net income. The more negative market values of the US dollar hedges would
have decreased shareholders’ equity by € 225 million. A 10% weaker euro at December 31, 2015 would have
led to a € 9 million decrease in net income. Shareholders’ equity would have increased by € 238 million. see Table 05
The impacts of fluctuations of the US dollar against the Russian rouble and of the euro against the British
pound and the Japanese yen on net income and shareholders’ equity are also included in accordance with
IFRS requirements.
However, many other financial and operational variables that could potentially reduce the effect of currency
fluctuations are excluded from the analysis. For instance:
•• Interest rates, commodity prices and all other exchange rates are assumed constant.
•• Exchange rates are assumed at a year-end value instead of the more relevant sales-weighted average
figure, which we utilise internally to better reflect both the seasonality of our business and intra-year
currency fluctuations.
•• The underlying forecasted cash flow exposure (which the hedge instrument mainly relates to) is not
required to be revalued in this analysis.
•• Operational issues, such as potential discounts to key accounts, which have high transparency regarding
the impacts of currency on our sourcing activities (due to their own private label sourcing efforts), are
also excluded from this presentation.
Utilising a centralised currency risk management system, our Group hedges currency needs for projected
sourcing requirements on a rolling basis up to 24 months in advance. In rare instances, hedges are see Treasury, p. 124
contracted beyond the 24-month horizon. Our goal is to have the vast majority of our hedging volume
secured six months prior to the start of a given season. The Group also largely hedges balance sheet risks.
Due to our strong global position, we are able to partly minimise currency risk by utilising natural hedges.
Our gross US dollar cash flow exposure after natural hedges calculated for 2016 was roughly € 6.3 billion
at year-end 2015, which we hedged using forward exchange contracts, currency options and currency
swaps. Our Group’s Treasury Policy allows us to utilise hedging instruments, such as currency options see Table 04
or option combinations, which provide protection from negative exchange rate fluctuations while – at the
same time – retaining the potential to benefit from future favourable exchange rate developments in the
financial markets.
As 2016 hedging has almost been completed, it is clear that the EUR/USD conversion rate will be less
favourable compared to 2015. Volume forecast variances and currency volatility in emerging markets (in s ee Subsequent Events
particular Argentina and Russia), where currencies depreciated rapidly in 2015 and at the beginning of and Outlook, p. 148
2016, will expose the adidas Group to substantial currency effects in 2016.
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Credit risks
A credit risk arises if a customer or other counterparty to a financial instrument fails to meet its contractual
obligations. The adidas Group is exposed to credit risks from its operating activities and from certain
financing activities. Credit risks arise principally from accounts receivable and, to a lesser extent, from
other third-party contractual financial obligations such as other financial assets, short-term bank deposits
and derivative financial instruments. Without taking into account any collateral, the carrying amount of see Note 29, p. 228
financial assets and accounts receivable represents the maximum exposure to credit risk.
At the end of 2015, there was no relevant concentration of credit risk by type of customer or geography. Our
credit risk exposure is mainly influenced by individual customer characteristics. Under the Group’s credit
policy, new customers are analysed for creditworthiness before standard payment and delivery terms and
conditions are offered. Tolerance limits for accounts receivable are also established for each customer.
Both creditworthiness and accounts receivable limits are monitored on an ongoing basis. Customers that
fail to meet the Group’s minimum creditworthiness are, in general, allowed to purchase products only on
a prepayment basis.
Other activities to mitigate credit risks include retention of title clauses as well as, on a selective basis,
credit insurances, accounts receivable sales without recourse and bank guarantees.
Objective evidence that financial assets are impaired includes, for instance, significant financial difficulty
of the issuer or debtor, indications of the potential bankruptcy of the borrower and the disappearance of an
active market for a financial asset because of financial difficulties. The Group utilises allowance accounts
for impairments that represent our estimate of incurred credit losses with respect to accounts receivable.
Allowance accounts are used as long as the Group is satisfied that recovery of the amount due is possible.
Once this is no longer the case, the amounts are considered irrecoverable and are directly written off
against the financial asset. The allowance consists of two components:
•• firstly, an allowance established for all receivables dependent on the ageing structure of receivables
past due date and
•• secondly, a specific allowance that relates to individually assessed risks for each specific customer –
irrespective of ageing.
At the end of 2015, no customer accounted for more than 10% of accounts receivable.
The Group Treasury department arranges currency, commodity and interest rate hedges, and invests cash,
with major banks of a high credit standing throughout the world. adidas Group companies are authorised
to work with banks rated BBB+ or higher. Only in exceptional cases are subsidiaries authorised to work
with banks rated lower than BBB+. To limit risk in these cases, restrictions are clearly stipulated, such
as maximum cash deposit levels. In addition, the credit default swap premiums of our partner banks are
monitored on a monthly basis. In the event that the defined threshold is exceeded, credit balances are
shifted to banks compliant with the limit.
We believe our risk concentration is limited due to the broad distribution of our investment business with
more than 20 globally operating banks. At December 31, 2015, no bank accounted for more than 8% of our
investments. Including subsidiaries’ short-term deposits in local banks, the average concentration was
1%. This leads to a maximum exposure of € 83 million in the event of default of any single bank. We have
further diversified our investment exposure by investing into AAA-rated money market funds.
In addition, in 2015, we held derivatives with a positive fair market value in the amount of € 239 million.
The maximum exposure to any single bank resulting from these assets amounted to € 59 million and the
average concentration was 4%.
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In accordance with IFRS 7, the table below includes further information about set-off possibilities of see Table 06
derivative financial assets and liabilities. The majority of agreements between financial institutions and
the adidas Group include a mutual right to set-off. However, these agreements do not meet the criteria
for offsetting in the statement of financial position, because the right to set-off is enforceable only in the
event of counterparty defaults.
The carrying amounts of recognised derivative financial instruments, which are subject to the mentioned see Table 06
agreements, are presented in the table below.
In line with IFRS 7 requirements, we have analysed the impact of changes in the Group’s most important
interest rates on net income and shareholders’ equity. The effect of interest rate changes on future cash
flows is excluded from this analysis. Nevertheless, accrued interest, which is recognised as a liability, has
been recalculated based on the hypothetical market interest rates as at December 31, 2015. Fair values
for derivative interest rate instruments accounted for as cash flow hedges were then re-evaluated based
on the hypothetical market interest rates with the resulting effects on net income and equity included in
the sensitivity analysis.
However, the effect on the income statement from changes in the fair values of hedged items and hedging
instruments attributable to interest rate changes was not material. Exclusions from this analysis are as
follows:
•• Some fixed-rate financial instruments, such as certificates of deposit, which we value at ‘fair value
through profit or loss’ due to the short-term maturity of these instruments. Potential effects due to
changes in interest rates are considered immaterial and are not recognised in the sensitivity analysis.
•• Other fixed-rate financial instruments are measured at amortised cost. Since a change in interest rates
would not change the carrying amount of this category of instruments, there is no net income impact
and they are excluded from this analysis.
2015 2014
Assets
Gross amounts of recognised financial assets 228 285
Financial instruments which qualify for set-off in the statement of financial position 0 0
Net amounts of financial assets presented in the statement of financial position 228 285
Set-off possible due to master agreeements (57) (53)
Total net amount of financial assets 171 232
Liabilities
Gross amounts of recognised financial liabilities (61) (55)
Financial instruments which qualify for set-off in the statement of financial position 0 0
Net amounts of financial liabilities presented in the statement of financial position (61) (55)
Set-off possible due to master agreeements 57 53
Total net amount of financial liabilities (4) (2)
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The interest rate sensitivity analysis assumes a parallel shift of the interest yield curve for all currencies and
was performed on the same basis for both 2014 and 2015. As in the prior year, a 100 basis point increase
or decrease in interest rates at December 31, 2015 would have had no major impact on shareholders’
equity and net income.
To reduce interest rate risks and maintain financial flexibility, a core tenet of our Group’s financial strategy
is to continue to use surplus cash flow from operations to reduce gross borrowings. Beyond that, the adidas see Treasury, p. 124
Group is constantly looking for adequate hedging strategies through interest rate derivatives in order to
mitigate interest rate risks.
In 2015, interest rates in Europe and North America remained at low levels. Given the central banks’
current interest rate policies and macroeconomic uncertainty, we do not foresee any major interest rate
increases in Europe in 2016. Due to the positive macroeconomic development in the USA, however, we
believe a slight increase in US interest rates is likely. At December 31, 2015, 80% of the Group’s financing
was denominated in euros.
Up to Up to Up to Up to Up to Up to Up to Total
1 year 2 years 3 years 4 years 5 years 6 years 7 years
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Future cash outflows arising from financial liabilities that are recognised in the Consolidated Statement of
Financial Position are presented in the table. This includes payments to settle obligations from borrowings see Table 07
as well as cash outflows from cash-settled derivatives with negative market values. Financial liabilities
that may be settled in advance without penalty are included on the basis of the earliest date of potential
repayment. Cash flows for variable-interest liabilities are determined with reference to the conditions at
the balance sheet date.
We ended the year 2015 with net debt of € 460 million (2014: € 185 million). Thus, the ratio of net borrowings
over EBITDA was 0.3 times at year-end, which is in line with the Group’s medium-term guideline of less
than two times.
ILLUSTRATION OF OPPORTUNITIES
In this report, we only illustrate opportunities we deem to be relevant for the Group in 2016. In addition,
the Group has already identified various other opportunities which could have a mid- to long-term positive
impact for the Group’s top- and bottom-line performance but are not described in detail in this report. The see Table 08
assessment of all opportunities is shown in the opportunities overview table.
Financial opportunities
Favourable financial market changes Major Possible
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Partnerships: The adidas Group is constantly evolving its partnership network within sport and culture,
such as with academic organisations and companies from other industries in research and development.
These partnerships have generated multiple new growth avenues for the Group, as we have acquired
product or process know-how and gained access to new distribution channels or markets. Partnerships,
strategic alliances and collaborations may enable the adidas Group to pursue further growth and efficiency
opportunities.
Personnel opportunities
The recruitment of highly qualified talent as well as the training and development of our employees,
in particular for our own-retail segment, may help us increase productivity, efficiency and employee
engagement and generate better-than-expected top- and bottom-line results. In addition, successfully
developing talents across the Group may increase employee engagement and performance and thus
contribute positively to sales and profitability improvements.
FINANCIAL OPPORTUNITIES
Favourable financial market changes
Favourable exchange and interest rate developments can potentially have a positive impact on the Group’s
financial results. Our Group Treasury department closely monitors the financial markets to identify and see Treasury, p. 124
exploit opportunities. Translation effects from the conversion of non-euro-denominated results into our
Group’s functional currency, the euro, might positively impact our Group’s financial performance.
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MANAGEMENT ASSESSMENT
OF PERFORMANCE, RISKS
AND OPPORTUNITIES, AND
OUTLOOK
In 2015, Group revenues rose 10% on a currency-neutral basis, driven by strong growth at both adidas
and Reebok. Currency-neutral Group sales grew in most market segments, with double-digit growth
in Western Europe, Greater China, Latin America and MEAA. As a result, Group revenues increased
significantly above our initial guidance of a mid-single-digit currency-neutral increase. Gross margin
increased 0.6 percentage points to 48.3% and was in line with our initial expectations of 47.5% to 48.5%.
This development was driven by the positive effects from a more favourable pricing, channel and category
mix, more than offsetting negative currency effects and higher input costs. Operating margin excluding
goodwill impairment losses declined 0.1 percentage points to 6.5%, in line with our guidance of between
6.5% and 7.0%. This development was primarily due to higher other operating expenses as a percentage of
sales in connection with the planned increase in expenditure for point-of-sale and marketing investments see Income Statement, p. 111
to strengthen brand desirability, which more than offset the increase in gross margin. Net income from
continuing operations excluding goodwill impairment losses grew 12% to € 720 million. This was above
our initial guidance of an improvement between 7% and 10%, despite the fact that the effective tax rate
for 2015 was 32.9%, and thus – mainly due to the non-recognition of deferred tax assets – well above the
initially expected level of around 29.5%.
In 2015, operating working capital developed positively throughout the year. While we had initially expected
average operating working capital as a percentage of sales to decrease moderately compared to the prior
year level of 22.4%, average operating working capital as a percentage of sales improved significantly in
2015 and ended the year at 20.5%, thus exceeding our initial expectations. Capital expenditure (excluding
acquisitions) amounted to € 513 million in 2015, thus below our guidance of around € 600 million. Investments
were mainly focused on adidas and Reebok controlled space initiatives, aimed at further strengthening s ee Statement of
the Group’s own-retail activities, franchise store presence as well as shop-in-shop presentations. Other Cash Flows, p. 119
areas of investments included the Group’s logistic infrastructure and IT systems as well as the further
development of our Group headquarters in Herzogenaurach, Germany.
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Beyond our financial performance, we also actively monitor the Group’s key non-financial KPIs on a regular
basis, as available. From a market share perspective, we continue to be very encouraged by our strong
performance in key emerging markets. In particular, Greater China, Latin America and South Korea were
notable standouts, as we further improved our market share in these markets in 2015. In Western Europe,
we saw momentum accelerate considerably in 2015, following significant changes to our organisational s ee Internal Group
set-up, which we implemented in the region. In North America, a region where we have underperformed in Management System, p. 102
previous years, we see momentum accelerating, driven by highly engaging consumer activation initiatives. s ee TaylorMade-adidas Golf
In the golf market, structural challenges continue to weigh on the sales development of TaylorMade-adidas Strategy, p. 69
Golf, despite an overall cleaner trading environment. Nevertheless, we continue to enjoy healthy market
share positions in key categories such as metalwoods and irons, with market shares above 30% and around
20%, respectively. In light of ongoing structural, commercial and operational issues TaylorMade-adidas
Golf experienced in 2014 and 2015, which resulted in declines in net sales and profitability, we initiated
a major restructuring programme in 2015, with the main objective to significantly improve TaylorMade-
adidas Golf’s profitability going forward. In addition to the restructuring programme, we have engaged
with an investment bank for the purpose of analysing future options for our golf business, in particular
the Adams and Ashworth brands.
We continued to maintain a very strong level of on-time in-full (OTIF) deliveries to our customers and
own-retail stores in 2015. As in prior years, the majority of our sales in 2015 were again generated from
products launched in the past 12 to 18 months. In addition, we received several awards and industry
recognitions for our new product innovations. Finally, our diligence and discipline in sustainability matters see Global Operations, p. 74
continues to yield strong recognition for our Group. In 2015, we were again represented in a variety of
high-profile sustainability indices. For the 16th consecutive time, we were selected to join the Dow Jones s ee Research and
Sustainability Indices (DJSI). In the sector ‘Textiles, Apparel & Luxury Goods’, we scored industry-best Development, p. 80
ratings in the category Innovation Management and received far above-average scores in Supply Chain
Management, Stakeholder Engagement, Environmental Management System, and Talent Attraction and
Retention. Furthermore, in 2015, we were ranked third among the Global 100 Most Sustainable Corporations see Sustainability, p. 94
in the World (Global 100 Index), recognised as best European company and as leader in our industry.
1 As published on March 5, 2015. The outlook was updated over the course of the year.
2 Excluding goodwill impairment of € 78 million.
3 Excluding goodwill impairment of € 34 million.
4 Includes continuing and discontinued operations.
5 Excluding acquisitions and finance leases.
1 76
3
Group M anagement Report – F inancial Review
Management Assessment of Performance, Risks and Opportunities, and Outlook
In 2016, we will see a specific emphasis on continuing to pursue growth opportunities, while also focusing
on driving improvements in the Group’s earnings. We will continue to over-proportionately invest in brand-
building activities and continue to focus on innovation platforms such as Boost, expanding our digital see Group Strategy, p. 54
activities as well as rolling out our controlled space initiatives globally.
Through our extensive pipeline of highly attractive and innovative products, which have received favourable
reviews from retailers, the positive effects from major sporting events, including the UEFA EURO 2016,
as well as through strict cost management, we project strong top- and bottom-line improvements in the s ee Subsequent Events
Group’s financial results in 2016. While less favourable hedging rates and higher input costs are projected and Outlook, p. 148
to weigh on the Group’s gross margin development, the Group’s profitability is expected to benefit from
lower other operating expenses as a percentage of sales. We believe that our outlook for 2016 is realistic
within the scope of the current trading and economic environment.
Assuming no significant deterioration in the global economy, we are confident to significantly grow our top
and bottom line in 2016. However, ongoing uncertainties regarding the economic outlook and consumer
sentiment in certain emerging markets as well as persisting high levels of currency volatility, represent
risks to the achievement of our stated financial goals and aspirations. No other material event between
the end of 2015 and the publication of this report has altered our view.
177
CONSOLI –
DATED
FINANCIAL
Responsibility Statement 180
Auditor’s Report 181
Consolidated Statement of Financial Position 182
Consolidated Income Statement 184
Consolidated Statement of Comprehensive Income 185
Consolidated Statement of Changes in Equity 186
Consolidated Statement of Cash Flows 188
Notes 189
• Notes to the Consolidated Statement of Financial Position 203
• Notes to the Consolidated Income Statement 235
• Additional Information 240
Statement of Movements of Intangible and Tangible Assets 248
Shareholdings 250
STATE –
MENTS
4
Consolidated F inancial Statements
Responsibility Statement
RESPONSIBILITY STATEMENT
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated
financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of
the Group, and the Group Management Report, which has been combined with the Management Report of
adidas AG, includes a fair review of the development and performance of the business and the position of
the Group, together with a description of the material opportunities and risks associated with the expected
development of the Group.
HERBERT HAINER
CEO
18 0
4
Consolidated F inancial Statements
Auditor’s Report
AUDITOR’S REPORT
We have audited the consolidated financial statements prepared by adidas AG, Herzogenaurach, comprising the
statement of financial position, income statement, statement of comprehensive income, statement of changes
in equity, statement of cash flows and the notes, together with the management report of the Company and
the Group for the business year from January 1 to December 31, 2015. The preparation of the consolidated
financial statements and the Group management report in accordance with IFRS, as adopted by the EU, and the
additional requirements of German commercial law pursuant to § 315a (1) HGB (Handelsgesetzbuch – ‘German
Commercial Code’) is the responsibility of the Company’s Executive Board. Our responsibility is to express an
opinion on the consolidated financial statements and on the Group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § 317 HGB and
German generally accepted standards for the audit of financial statements promulgated by the Institut der
Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and
perform the audit such that misstatements materially affecting the presentation of the net assets, financial
position and profit or loss in the consolidated financial statements in accordance with the applicable financial
reporting framework and in the Group management report are detected with reasonable assurance. Knowledge
of the business activities and the economic and legal environment of the Group and expectations as to possible
misstatements are taken into account in the determination of audit procedures. The effectiveness of the
accounting-related internal control system and the evidence supporting the disclosures in the consolidated
financial statements and the Group management report are examined primarily on a test basis within the
framework of the audit. The audit includes assessing the annual financial statements of those entities included
in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation
principles used and significant estimates made by management, as well as evaluating the overall presentation
of the consolidated financial statements and Group management report. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRS, as
adopted by the EU, and the additional requirements of German commercial law pursuant to § 315a (1) HGB and
give a true and fair view of the net assets, financial position and profit or loss of the Group in accordance with
these requirements. The Group management report is consistent with the consolidated financial statements
and as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and
risks of future development.
Braun Wolper
Wirtschaftsprüfer Wirtschaftsprüfer
(German Public Auditor) (German Public Auditor)
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4
Consolidated F inancial Statements
Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
ADIDAS AG CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS) € IN MILLIONS
Assets
Cash and cash equivalents 5 1,365 1,683 (18.9)
Short-term financial assets 6 5 5 0.8
Accounts receivable 7 2,049 1,946 5.3
Other current financial assets 8 367 398 (7.8)
Inventories 9 3,113 2,526 23.2
Income tax receivables 34 97 92 4.9
Other current assets 10 489 425 15.2
Assets classified as held for sale 11 12 272 (95.7)
Total current assets 7,497 7,347 2.0
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4
Consolidated F inancial Statements
Consolidated Statement of Financial Position
1 83
4
Consolidated F inancial Statements
Consolidated Income Statement
CONSOLIDATED INCOME
STATEMENT
ADIDAS AG CONSOLIDATED INCOME STATEMENT (IFRS) € IN MILLIONS
Basic earnings per share from continuing operations (in €) 35 3.37 2.67 26.2%
Diluted earnings per share from continuing operations (in €) 35 3.37 2.67 26.2%
18 4
4
Consolidated F inancial Statements
Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
ADIDAS AG CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS) € IN MILLIONS
Items of other comprehensive income that are or will be reclassified to profit or loss
when specific conditions are met
(Loss)/gain on cash flow hedges, net of tax 29 (118) 211
Reclassification of foreign currency differences attributable to discontinued operations 5 –
Currency translation differences 129 104
Subtotal of items of other comprehensive income that are or will be reclassified to
profit or loss when specific conditions are met 16 315
1 Includes actuarial gains or losses relating to defined benefit obligations, return on plan assets (excluding interest income) and the asset ceiling effect.
Rounding differences may arise in percentages and totals.
The accompanying notes are an integral part of these consolidated financial statements.
1 85
4
Consolidated F inancial Statements
Consolidated Statement of Changes in Equity
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
ADIDAS AG CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (IFRS) € IN MILLIONS
1 Reserves for remeasurements of defined benefit plans (IAS 19), option plans and acquisition of shares from non-controlling interest shareholders.
Rounding differences may arise in percentages and totals.
The accompanying notes are an integral part of these consolidated financial statements.
18 6
4
Consolidated F inancial Statements
Consolidated Statement of Changes in Equity
Cumulative Hedging reserve Other reserves 1 Retained earnings Shareholders’ equity Non-controlling Total equity
currency interests
translation
differences
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4
Consolidated F inancial Statements
Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF
CASH FLOWS
ADIDAS AG CONSOLIDATED STATEMENT OF CASH FLOWS (IFRS) € IN MILLIONS
Operating activities:
Income before taxes 1,039 835
Adjustments for:
Depreciation, amortisation and impairment losses 12, 13, 14, 31, 33 393 405
Reversals of impairment losses 30 (1) (1)
Unrealised foreign exchange losses, net 36 32
Interest income 33 (20) (17)
Interest expense 33 65 62
Losses on sale of property, plant and equipment, net 15 16
Other non-cash income 30, 31 (1) (1)
Payment for external funding of pension obligations (CTA) – (65)
Operating profit before working capital changes 1,527 1,267
Increase in receivables and other assets (183) (36)
Increase in inventories (639) (76)
Increase/(decrease) in accounts payable and other liabilities 823 (117)
Cash generated from operations before interest and taxes 1,527 1,037
Interest paid (55) (59)
Income taxes paid (386) (284)
Net cash generated from operating activities – continuing operations 1,086 694
Net cash generated from operating activities – discontinued operations 3 7
Net cash generated from operating activities 1,090 701
Investing activities:
Purchase of trademarks and other intangible assets (49) (49)
Proceeds from sale of trademarks and other intangible assets 0 1
Purchase of property, plant and equipment (464) (499)
Proceeds from sale of property, plant and equipment 6 4
Acquisition of subsidiaries and other business units net of cash acquired 4 (214) (6)
Proceeds from disposal of discontinued operations net of cash disposed 164 –
(Purchase of)/proceeds from sale of short-term financial assets (0) 37
Purchase of investments and other long-term assets (48) (36)
Interest received 20 17
Net cash used in investing activities – continuing operations (584) (531)
Net cash used in investing activities – discontinued operations (6) (6)
Net cash used in investing activities (591) (537)
Financing activities:
Repayments of long-term borrowings (10) –
Proceeds from issue of Eurobonds 18 – 990
Repayment of Eurobond 18 – (500)
Repayments of finance lease obligations (2) (2)
Dividend paid to shareholders of adidas AG 26 (303) (314)
Dividend paid to non-controlling interest shareholders (6) (4)
Repurchase of treasury shares 26 (301) (300)
Proceeds from short-term borrowings 35 68
Repayments of short-term borrowings 18 (103) (56)
Net cash used in financing activities (691) (118)
18 8
4
Consolidated F inancial Statements
Notes
NOTES
adidas AG (hereafter also referred to as ‘the company’) is a listed German stock corporation and parent
of the adidas Group located at Adi-Dassler-Str. 1, 91074 Herzogenaurach, Germany. adidas AG and its
subsidiaries (collectively the ‘adidas Group’ or the ‘Group’) design, develop, produce and market a broad
range of athletic and sports lifestyle products. As at December 31, 2015, the operating activities of the
adidas Group are divided into 13 operating segments: Western Europe, North America, Greater China,
Russia/CIS, Latin America, Japan, Middle East, South Korea, Southeast Asia/Pacific, TaylorMade-adidas
Golf, Reebok-CCM Hockey, Runtastic and Other centrally managed businesses. Due to the divestiture
of the Rockport operating segment on July 31, 2015, income and expenses of the Rockport operating
segment are reported as discontinued operations as at December 31, 2015 and 2014, respectively
SE E N OTE 03 .
Each market comprises all wholesale, retail and e-commerce business activities relating to the distribution
and sale of adidas and Reebok products to retail customers and end consumers. adidas and Reebok branded
products include footwear, apparel and hardware, such as bags and balls.
The operating segment TaylorMade-adidas Golf includes the four brands TaylorMade, adidas Golf, Adams
Golf and Ashworth. TaylorMade designs, develops and distributes primarily golf clubs, balls and accessories.
adidas Golf branded products include footwear, apparel and accessories. Adams Golf designs and distributes
mainly golf clubs as well as a small range of accessories. Ashworth designs and distributes men’s and
women’s golf-inspired apparel and footwear.
Rockport predominantly designs and distributes leather footwear for men and women.
Reebok-CCM Hockey designs, produces and distributes ice hockey equipment such as sticks, skates and
protection gear. In addition, Reebok-CCM Hockey designs, produces and distributes apparel mainly under
the brand names Reebok Hockey and CCM.
Runtastic operates in the digital health and fitness space. The company provides a comprehensive ecosystem
for tracking and managing health and fitness data.
The operating segment Other centrally managed businesses primarily includes the business activities of
the labels Y-3 and Porsche Design Sport by adidas as well as the business activities of the brand Five Ten
in the outdoor action sports sector. Furthermore, the segment also comprises the own-retail activities of
the adidas neo label as well as International Clearance Management.
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4
Consolidated F inancial Statements
Notes
01 The consolidated financial statements of adidas AG as at December 31, 2015 comprise adidas AG and its
GENERAL subsidiaries and are prepared in compliance with International Financial Reporting Standards (IFRS), as to
be applied in the European Union (EU) as at December 31, 2015, and the additional requirements pursuant
to § 315a section 1 German Commercial Code (Handelsgesetzbuch – HGB).
The following new standards and interpretations and amendments to existing standards and
interpretations are applicable for the first time for financial years beginning on January 1, 2015:
•• IAS 19 Amendment – Defined Benefit Plans: Employee Contributions (EU effective date: July 1, 2014):
This amendment had no material impact on the Group’s financial statements.
•• Improvements to IFRSs (2010 – 2012) (EU effective date: July 1, 2014): These improvements required
additional disclosures in the Group’s financial statements.
•• Improvements to IFRSs (2011 – 2013) (EU effective date: July 1, 2014): These improvements had no
material impact on the Group’s financial statements.
New standards and interpretations as well as amendments to existing standards and interpretations are
usually not applied by the Group before the effective date.
New standards and interpretations and amendments to existing standards and interpretations that will be
effective for financial years beginning after January 1, 2015, and which have not been applied in preparing
these consolidated financial statements are:
•• IAS 1 Amendment – Disclosure Initiative (EU effective date: January 1, 2016): This amendment is not
expected to have any material impact on the Group’s financial statements.
•• Improvements to IFRSs (2012 – 2014) (EU effective date: January 1, 2016): These improvements are not
expected to have any material impact on the Group’s financial statements.
•• IFRS 10 and IAS 28 Amendment – Sale or Contribution of Assets between an Investor and its Associate
or Joint Venture (EU effective date: indefinitely postponed): This amendment is not expected to have
any impact on the Group’s financial statements.
•• IAS 27 Amendment – Equity Method in Separate Financial Statements (EU effective date: January 1,
2016): This amendment is not expected to have any impact on the Group’s financial statements.
•• IAS 16 and IAS 41 Amendment – Agriculture: Bearer Plants (EU effective date: January 1, 2016): This
amendment is not expected to have any impact on the Group’s financial statements.
•• IAS 16 and IAS 38 Amendment – Clarification of Acceptable Methods of Depreciation and Amortisation
(EU effective date: January 1, 2016): This amendment is not expected to have any impact on the Group’s
financial statements.
•• IFRS 11 Amendment – Accounting for Acquisitions of Interests in Joint Operations (EU effective
date: January 1, 2016): This amendment is not expected to have any impact on the Group’s financial
statements.
The following new standards and interpretations as well as amendments to existing standards and
interpretations were issued by the International Accounting Standards Board (IASB) and are expected to
be of relevance for the company. These are not yet effective in the EU and hence have not been applied in
preparing these consolidated financial statements.
•• IFRS 9 Financial Instruments (IASB effective date: January 1, 2018): The respective analysis of any
expected impact on the Group’s financial statements is in progress.
•• IFRS 15 Revenue from contracts with customers (IASB effective date: January 1, 2018): The respective
analysis of any expected impact on the Group’s financial statements is in progress.
•• IFRS 16 Leases (IASB effective date: January 1, 2019): The respective analysis of any expected impact
on the Group’s financial statements is in progress.
The consolidated financial statements have in principle been prepared on the historical cost basis with the
exception of certain items in the statement of financial position such as financial instruments valued at
fair value through profit or loss, available-for-sale financial assets, derivative financial instruments, plan
assets and receivables, which are measured at fair value.
The consolidated financial statements are presented in euros (€) and, unless otherwise stated, all
values are presented in millions of euros (€ in millions). Due to rounding principles, numbers presented
may not sum up exactly to totals provided.
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4
Consolidated F inancial Statements
Notes
02 The consolidated financial statements are prepared in accordance with the consolidation, accounting and
SUMMARY OF valuation principles described below.
SIGNIFICANT
ACCOUNTING Principles of consolidation
POLICIES The consolidated financial statements include the financial statements of adidas AG and all its direct and
indirect subsidiaries, which are prepared in accordance with uniform accounting principles. A company is
considered a subsidiary if it is controlled by adidas AG. Control exists when the adidas Group is exposed to,
or has rights to, variable returns from its involvement with the investee and has the ability to affect those
returns through its power over the investee.
The number of consolidated subsidiaries evolved as follows for the years ending December 31, 2015
and December 31, 2014, respectively:
2015 2014
The subsidiaries are held either directly by adidas AG or indirectly via the two holding companies adidas
Beteiligungsgesellschaft mbH in Germany or adidas International B.V. in the Netherlands.
A schedule of the shareholdings of adidas AG is shown in Attachment II to the consolidated financial
statements S E E S H A R E H O L D I N G S O F A D I DAS AG, H E RZO G E N AU R AC H , P. 25 0 . This schedule comprises
information about the name, domicile, currency and equity of all consolidated subsidiaries as well as the
respective share held in the capital of these subsidiaries. Furthermore, the schedule of the shareholdings
of adidas AG will be published on the electronic platform of the German Federal Gazette.
Within the scope of the first-time consolidation, all acquired assets and liabilities are recognised in the
statement of financial position at fair value at the acquisition date. A debit difference between the acquisition
cost and the proportionate fair value of assets, liabilities and contingent liabilities is shown as goodwill. A
credit difference is recorded in the income statement.
Acquisitions of additional investments in subsidiaries which are already controlled are recorded as
equity transactions. Therefore, neither fair value adjustments of assets and liabilities nor gains or losses
are recognised. Any difference between the cost for such an additional investment and the carrying amount
of the net assets at the acquisition date is directly recorded in shareholders’ equity.
The financial effects of intercompany transactions as well as any unrealised gains and losses arising
from intercompany business relations are eliminated in preparing the consolidated financial statements.
1 91
4
Consolidated F inancial Statements
Notes
Principles of measurement
The following table includes an overview of selected measurement principles used in the preparation of
the consolidated financial statements.
Assets
Cash and cash equivalents Nominal amount
Short-term financial assets At fair value through profit or loss
Accounts receivable Amortised cost
Inventories Lower of cost or net realisable value
Assets classified as held for sale Lower of carrying amount and fair value less costs to sell
Property, plant and equipment Amortised cost
Goodwill Impairment-only approach
Intangible assets (except goodwill):
With definite useful life Amortised cost
With indefinite useful life Impairment-only approach
Other financial assets (categories according to IAS 39):
At fair value through profit or loss At fair value through profit or loss
Held to maturity Amortised cost
Loans and receivables Amortised cost
Available-for-sale At fair value in other comprehensive income or at
amortised cost
Liabilities
Borrowings Amortised cost
Accounts payable Amortised cost
Other financial liabilities Amortised cost
Provisions:
Pensions Projected unit credit method
Other provisions Expected settlement amount
Accrued liabilities Amortised cost
Currency translation
Transactions in foreign currencies are initially recorded in the respective functional currency by applying
the spot exchange rate valid at the transaction date to the foreign currency amount.
In the individual financial statements of subsidiaries, monetary items denominated in non-functional
currencies of the subsidiaries are generally translated into the functional currency at closing exchange
rates at the balance sheet date. The resulting currency gains and losses are recorded directly in the income
statement.
Assets and liabilities of the Group’s non-euro functional currency subsidiaries are translated into the
presentation currency, the euro, which is also the functional currency of adidas AG, at closing exchange rates
at the balance sheet date. For practical reasons, revenues and expenses are translated at average rates
for the period which approximate the exchange rates on the transaction dates. All cumulative differences
from the translation of equity of foreign subsidiaries resulting from changes in exchange rates are included
in a separate item within shareholders’ equity without affecting the income statement.
192
4
Consolidated F inancial Statements
Notes
A summary of exchange rates to the euro for major currencies in which the Group operates is as follows:
EXCHANGE RATES
€ 1 equals Average rates for the year ending Dec. 31, Spot rates at Dec. 31,
Discontinued operations
A component of the Group’s business is classified as a discontinued operation if the operations and cash
flows of the component can be clearly distinguished, operationally and for financial reporting purposes, from
the rest of the Group and if the component either has been disposed of or is classified as held for sale, and:
•• represents a separate major line of business or geographic area of operations,
•• is part of a single coordinated plan to dispose of a separate major line of business or geographic area
of operations or
•• is a subsidiary acquired exclusively with a view to resale.
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4
Consolidated F inancial Statements
Notes
Hedges of net investments in foreign entities are accounted for in a similar way to cash flow hedges. If
the hedging instrument is a derivative (e.g. a forward exchange contract) or a foreign currency borrowing,
effective currency gains and losses in the derivative and all gains and losses arising on the translation of
the borrowing, respectively, are recognised in equity.
The Group documents the relationship between hedging instruments and hedge objects at transaction
inception, as well as the risk management objectives and strategies for undertaking various hedge
transactions. This process includes linking all derivatives designated as hedges to specific firm commitments
and forecasted transactions. The Group also documents its assessment of whether the derivatives that are
used in hedging transactions are highly effective by using different methods of effectiveness testing, such
as the ‘dollar offset method’ or the ‘hypothetical derivative method’.
The fair values of currency options, forward exchange contracts and commodity futures are determined
on the basis of market conditions on the reporting dates. The fair value of a currency option is determined
using generally accepted models to calculate option prices. The fair value of an option is influenced not
only by the remaining term of the option but also by additional factors, such as the actual foreign exchange
rate and the volatility of the underlying foreign currency base. Fair values are determined taking into
consideration the counterparty risk. The adidas Group has exercised the option to calculate the amounts
on counterparty level according to IFRS 13 ‘Fair Value Measurement’, paragraph 48.
Inventories
Merchandise and finished goods are valued at the lower of cost or net realisable value, which is the estimated
selling price in the ordinary course of business less the estimated costs of completion and the estimated
costs necessary to make the sale. Costs are determined using a standard valuation method: the ‘average
cost method’. Costs of finished goods include cost of raw materials, direct labour and the components of
the manufacturing overheads which can reasonably be attributed. The allocation of overheads is based on
the planned average utilisation. The net realisable value allowances are computed consistently throughout
the Group based on the age and expected future sales of the items on hand.
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4
Consolidated F inancial Statements
Notes
Years
Land indefinite
Land leases 99
Buildings and leasehold improvements 20 – 50 1
Technical equipment and machinery as well as other equipment and furniture and fixtures 2 – 10
Expenditures for repairs and maintenance are expensed as incurred. Renewals and improvements are
capitalised and depreciated separately, if the recognition criteria are met.
Impairment losses
If facts and circumstances indicate that non-current assets (e.g. property, plant and equipment, intangible
assets including goodwill and certain financial assets) might be impaired, the recoverable amount is
determined. It is measured at the higher of its fair value less costs to sell and value in use. Non-financial
instruments measured at the recoverable amount primarily relate to impaired property, plant and equipment
being measured at Level 3 according to IFRS 13 ‘Fair Value Measurement’ and taking unobservable inputs
(e.g. profit or cash flow planning) into account.
An impairment loss is recognised in other operating expenses or reported in goodwill impairment losses
if the carrying amount exceeds the recoverable amount.
The impairment test for goodwill is performed based on cash-generating units which represent the
lowest level within the Group at which goodwill is monitored for internal management purposes. If there
is an impairment loss for a cash-generating unit, first the carrying amount of any goodwill allocated to the
cash-generating unit is reduced. Subsequently, provided that the recoverable amount is lower than the
carrying amount, the other non-current assets of the unit are reduced pro rata on the basis of the carrying
amount of each asset in the unit.
Irrespective of whether there is an impairment indication, intangible assets with an indefinite useful
life (in particular trademarks) and goodwill acquired in business combinations are tested annually for
impairment.
An impairment loss recognised in goodwill is not reversible. With respect to all other impaired assets,
an impairment loss recognised in prior periods is reversed affecting the income statement if there has been
a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only
to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined (net of depreciation or amortisation) if no impairment loss had been recognised.
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4
Consolidated F inancial Statements
Notes
Leases
Under finance lease arrangements, the substantial risks and rewards associated with an asset
are transferred to the lessee. At the beginning of the lease arrangement, the respective asset and a
corresponding liability are recognised at the fair value of the asset or, if lower, the net present value of
the minimum lease payments. For subsequent measurement, minimum lease payments are apportioned
between the finance expense and the reduction of the outstanding liability. The finance expense is allocated
to each period during the lease term so as to produce a constant periodic interest rate on the remaining
balance of the liability. In addition, depreciation and any impairment losses for the associated assets are
recognised. Depreciation is performed over the lease term or, if shorter, over the useful life of the asset.
Under operating lease agreements, rent expenses are recognised on a straight-line basis over the
term of the lease.
Goodwill
Goodwill is an asset representing the future economic benefits arising from assets acquired in a business
combination that are not individually identified and separately recognised. This results when the purchase
cost exceeds the fair value of acquired identifiable assets, liabilities and contingent liabilities. Goodwill
arising from the acquisition of a foreign entity and any fair value adjustments to the carrying amounts
of assets, liabilities and contingent liabilities of that foreign entity are treated as assets, liabilities and
contingent liabilities of the respective reporting entity, and are translated at exchange rates prevailing at the
date of the initial consolidation. Goodwill is carried in the functional currency of the acquired foreign entity.
Acquired goodwill is valued at cost and is tested for impairment on an annual basis and additionally
when there are indications of potential impairment.
Years
Trademarks indefinite
Software 5 – 7
Patents, trademarks and concessions 2 – 15
Financial assets
All purchases and sales of financial assets are recognised on the trade date. Costs of purchases include
transaction costs. Available-for-sale financial assets include non-derivative financial assets which are not
allocable under another category of IAS 39. If their respective fair value can be measured reliably, they
are subsequently carried at fair value. If this is not the case, these are measured at cost. Realised and
unrealised gains and losses arising from changes in the fair value of financial assets are included in the
income statement for the period in which they arise, except for available-for-sale financial assets where
unrealised gains and losses are recognised in equity unless they are impaired.
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4
Consolidated F inancial Statements
Notes
Contingent liabilities
Contingent liabilities are possible obligations that arise from past events and whose existence will be
confirmed only by the occurrence of one or more uncertain future events not wholly within the control of
the Group. Additionally, contingent liabilities may be present obligations that arise from past events but
which are not recognised because it is not probable that an outflow of resources will be required to settle
the obligation or the amount of the obligation cannot be measured with sufficient reliability. Contingent
liabilities are not recognised in the consolidated statement of financial position but are disclosed and
explained in the Notes SE E N OT E 38 .
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4
Consolidated F inancial Statements
Notes
Treasury shares
When treasury shares recognised as equity are repurchased, the amount of the consideration paid, which
includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. The
nominal value of € 1 per treasury share is debited to share capital. Any premium or discount to the nominal
value is shown as an adjustment to the retained earnings. If treasury shares are sold or re-issued, the
nominal value of the shares will be credited to share capital.
Revenue
Revenue in terms of income derived from the sale of goods is recognised when the significant risks and
rewards of ownership of the goods are transferred to the buyer and when the adidas Group does not retain
any continuing managerial involvement with the goods. The timing of the transfer of significant risks and
rewards depends on the individual terms of the sales agreement (terms of delivery).
Revenue from the rendering of services is recognised when the respective services are rendered.
In addition, revenue from the sale of goods and from the rendering of services is only recognised when
the amount of revenue as well as associated costs can be measured reliably and when it is probable that
the economic benefits associated with the transaction will flow to the Group.
Revenue is measured at the fair value of the consideration received or receivable, net of returns, early
payment discounts and rebates.
Under certain conditions and in accordance with contractual agreements, customers of the adidas
Group have the right to return products and to either exchange them for similar or other products or to
return the products against the issuance of a credit note. Revenue related to estimated returns is accrued
based on past experience by means of a provision for returns, allowances and warranty S E E NOTE 20 .
Provided that the customers meet certain pre-defined conditions, the adidas Group grants its customers
different types of globally aligned performance-based rebates. Examples are sales growth and loyalty as
well as sell-out support, e.g. through retail space management/franchise. When it is assumed that the
customer fulfils the requirements for being granted the rebate, this amount is accrued by means of an
accrued liability for marketing and sales SE E N OT E 21 .
In addition, the adidas Group generates revenue from the licensing-out of the right to use the adidas,
Reebok and TaylorMade brands as well as various other trademarks to third parties. The related royalty
and commission income is recognised based on the contract terms on an accrual basis.
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Notes
Interest
Interest is recognised as income or expense as incurred using the ‘effective interest method’ with the
exception of interest that is directly attributable to the acquisition, construction or production of a qualifying
asset. This interest is capitalised as part of the cost of the qualifying asset.
Government grants
The Group receives government grants related to income in the form of subsidies, subventions or premiums
from local, national or international government authorities such as those of the Federal Republic of
Germany, the European Union and the Free State of Bavaria.
Government grants related to income are recognised if there is reasonable assurance that the grants
will be received and that the Group will comply with the conditions attached.
Grants related to income are reported in the consolidated income statement as a deduction from the
related expenses.
Income taxes
Current income taxes are computed in accordance with the applicable taxation rules established in the
countries in which the Group operates.
The Group computes deferred taxes for all temporary differences between the carrying amount and the
tax base of its assets and liabilities and tax loss carry-forwards. As it is not permitted to recognise a deferred
tax liability for the initial recognition of goodwill, the Group does not compute any deferred taxes thereon.
Deferred tax assets arising from deductible temporary differences and tax loss carry-forwards which
exceed taxable temporary differences are only recognised to the extent that it is probable that the company
concerned will generate sufficient taxable income to realise the associated benefit.
Income tax is recognised in the income statement except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
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Consolidated F inancial Statements
Notes
03 At December 31, 2014, due to concrete plans to sell the Rockport operating segment, divestiture within the
DISCONTINUED next twelve months was considered as highly probable. As a consequence, the Rockport operating segment
OPERATIONS was reported as discontinued operations for the first time in the 2014 consolidated financial statements.
On January 23, 2015, the adidas Group signed a definitive agreement to sell the Rockport operating
segment. The transaction was completed on July 31, 2015 for a preliminary cash consideration of
US $ 181 million plus fixed and contingent promissory notes.
The fair value of the contingent consideration was estimated by applying the discounted cash flow
method. As per December 31, 2015, the fair value increased by US $ 1 million since July 31, 2015.
The results of the Rockport operating segment are shown as discontinued operations in the consolidated
income statement:
DISCONTINUED OPERATIONS
The loss from discontinued operations in an amount of € 46 million (2014: € 68 million) is entirely attributable
to the shareholders of adidas AG.
04 Effective August 5, 2015, adidas International B.V. completed the acquisition of runtastic GmbH (‘Runtastic’)
ACQUISITION OF and consequently owns 100% of the voting rights. Founded in 2009 and headquartered in Pasching near
SUBSIDIARIES AS Linz/Austria, Runtastic is a health and fitness apps and related hardware company. With over 160 million
WELL AS ASSETS downloads and over 80 million registered users, Runtastic is a leader in the digital health and fitness
AND LIABILITIES space. The company provides a comprehensive ecosystem for tracking and managing health and fitness
data. With this acquisition, the adidas Group intends to further expand its market position within the digital
health and fitness space. Runtastic was acquired for a purchase price of € 213 million in cash plus earn-out
components which are measured based on the discounted cash flow method. The earn-out components are
dependent on retention of the Runtastic management as well as on the achievement of certain performance
measures over the first three years after the acquisition. At the acquisition date, the amount recognised
as earn-out components was equivalent to the fair value.
2 00
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Consolidated F inancial Statements
Notes
At the acquisition date, the acquisition had the following effect on the Group’s assets and liabilities, based
on a preliminary purchase price allocation:
The fair value of intangible assets has been measured provisionally pending completion of an independent
valuation.
The following valuation methods for the acquired assets were applied:
•• Trademarks: The ‘relief-from-royalty method’ was applied for the trademarks/brand names. The fair
value was determined by discounting notional royalty savings after tax and adding a tax amortisation
benefit, resulting from the amortisation of the acquired asset.
•• Other intangible assets: For the valuation of customer relationships, the ‘multi-period-excess-earnings
method’ was used. The respective future excess cash flows were identified and adjusted in order to
eliminate all elements not associated with these assets. Future cash flows were measured on the
basis of the expected net sales by deducting variable and sales-related imputed costs for the use of
contributory assets. Subsequently, the outcome was discounted using the appropriate discount rate and
adding a tax amortisation benefit. For the valuation of technology (internally generated software), the
‘depreciated-replacement-cost method’ was used. The replacement costs are determined by applying
an index to the asset’s historical cost. The replacement costs are then adjusted for the loss in value
caused by depreciation.
The excess of the acquisition cost paid versus the net of the amounts of the fair values assigned to all assets
acquired and liabilities assumed, taking into consideration the respective deferred taxes, was recognised as
goodwill. It mainly arose from expected synergies. Any acquired asset that did not meet the identification
and recognition criteria for an asset was included in the amount recognised as goodwill.
2 01
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Consolidated F inancial Statements
Notes
The goodwill arising on this acquisition was allocated to the groups of cash-generating units of the regional
markets which are responsible for the joint distribution of adidas and Reebok based on the expected
operating/contribution margin synergy potential. The goodwill is not deductible for tax purposes and is
denominated in euro as the local functional currency.
The acquired subsidiary generated net sales in an amount of € 8 million as well as losses in an amount
of € 0 million for the period from August 5 to December 31, 2015. If this acquisition had occurred on
January 1, 2015, total Group net sales would have been € 16.9 billion and net income attributable to
shareholders would have been € 636 million for the year ending December 31, 2015.
Effective January 2, 2015, Reebok International Limited completed the acquisition of Refuel (Brand
Distribution) Limited (‘Refuel’) and consequently owns 100% of the voting rights. Based in London (UK),
Refuel mainly markets and distributes apparel of Mitchell & Ness. With this acquisition, the adidas Group
has taken over all distribution rights of Mitchell & Ness outside of North America. The entire business of
Refuel was acquired for a purchase price of GBP 11 million in cash.
The acquisition had the following effect on the Group’s assets and liabilities, based on a purchase price
allocation:
The following valuation methods for the acquired assets were applied:
•• Inventories: The ‘pro rata basis valuation’ was applied for estimating the fair value of acquired
inventories. Realised margins were added to the carrying amount of acquired inventories. Subsequently,
the costs for completion for selling, advertising and general administration as well as a reasonable
profit allowance were deducted.
•• Other intangible assets: For the valuation of customer relationships, the ‘multi-period-excess-earnings
method’ was used. The respective future excess cash flows were identified and adjusted in order to
eliminate all elements not associated with these assets. Future cash flows were measured on the
basis of the expected net sales by deducting variable and sales-related imputed costs for the use of
contributory assets. Subsequently, the outcome was discounted using the appropriate discount rate
and adding a tax amortisation benefit.
The acquired subsidiary generated net sales in an amount of € 11 million as well as profits in an amount
of € 0 million for the period from January 2 to December 31, 2015.
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Effective November 24, 2014, Reebok International Limited completed the acquisition of Luta Ltd. (‘Luta’).
Based in London (UK), Luta designs and sells boxing and workout clothing. With this acquisition, the adidas
Group has entered into a long-term partnership with ‘Fight for Peace’, a non-profit organisation which
combines boxing and martial arts with education and personal development. In addition, this partnership
facilitated the completion of a licence agreement with the mixed martial arts organisation ‘Ultimate Fighting
Championship’ (UFC). The entire business of Luta was acquired for a purchase price of GBP 5 million in cash.
At the acquisition date, the acquisition had the following effect on the Group’s assets and liabilities,
based on a purchase price allocation:
The following valuation method for the acquired assets was applied:
•• Trademarks and similar rights: The ‘relief-from-royalty method’ was applied. The fair value was
determined by discounting notional royalty savings after tax and adding a tax amortisation benefit,
resulting from the amortisation of the acquired asset.
The acquired subsidiary generated net sales of € 0 million as well as net losses of € 0.2 million in
December 2014. If this acquisition had occurred on January 1, 2014, total Group net sales would have
been € 14.5 billion and net income attributable to shareholders would have been € 489 million for the
year ending December 31, 2014.
05 Cash and cash equivalents consist of cash at banks, cash on hand, short-term deposits and investments in
CASH AND CASH money market funds. Short-term financial assets are only shown as cash and cash equivalents if they are
EQUIVALENTS readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
06 Short-term financial assets are classified ‘at fair value through profit or loss’. Changes in the fair value
SHORT-TERM are recognised in the income statement as they occur.
FINANCIAL ASSETS The majority of short-term financial assets are time deposits.
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Notes – Notes to the Consolidated Statement of Financial Position
07 Accounts receivable consist mainly of the currencies US dollar, euro, Chinese renminbi as well as Japanese
ACCOUNTS yen and are as follows:
RECEIVABLE
ACCOUNTS RECEIVABLE
€ in millions Past due Past due Past due Past due Past due
1 – 30 days 31 – 60 days 61 – 90 days 91 – 180 days > 180 days
With respect to accounts receivable as at the balance sheet date past due but not impaired, based on
credit history and current credit ratings, there are no indications that customers will not be able to meet
their obligations.
Further, no indications of default are recognisable for accounts receivable that are neither past due
nor impaired.
For further information about credit risks SE E R I SK AN D O P P O RT UN I T Y R E P O RT, P. 156 .
Currency options 5 30
Forward exchange contracts 202 240
Security deposits 67 64
Sundry 93 64
Other current financial assets 367 398
For further information about currency options and forward exchange contracts SE E N OTE 29 .
2 04
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Goods in transit mainly relate to shipments of finished goods and merchandise from suppliers in Asia to
subsidiaries in Europe, Asia, North America and Latin America.
Prepaid expenses relate mainly to promotion and service contracts as well as rents.
11 At December 31, 2015, assets held for sale mainly comprise land of adidas AG amounting to € 11 million
ASSETS/LIABILITIES (2014: € 11 million), following a signed contract of sale, which is still awaiting certain conditions to be
AND DISPOSAL fulfilled that are not in the area of influence of the adidas Group.
GROUPS CLASSIFIED As of July 31, 2015, the Rockport operating segment was divested. The following assets and liabilities
AS HELD FOR SALE which were reported as assets/liabilities held for sale since December 31, 2014 due to the concrete plans
to sell the operating segment are consequently derecognised from the consolidated statement of financial
position as of July 31, 2015. The Rockport operating segment is part of Other Businesses (discontinued
operations).
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
At December 31, 2014, impairment losses of € 104 million (before transaction costs) for write-downs of the
disposal group Rockport to the lower of its carrying amount and its fair value less costs to sell have been
included in ‘Losses/gains from discontinued operations, net of tax’ SEE NOTE 03 . At December 31, 2014,
the fair value less costs to sell amounted to € 211 million. The impairment losses have been applied to
reduce the carrying amount of goodwill, trademarks and other intangible assets as well as property, plant
and equipment.
At December 31, 2014, the disposal group Rockport was stated at fair value less costs to sell and
comprised the following major classes of assets and liabilities:
Accounts receivable 49
Other current financial assets 1
Inventories 88
Total current assets 139
Property, plant and equipment 7
Trademarks 112
Other intangible assets 1
Total non-current assets 121
Total assets 260
Accounts payable 37
Other current provisions 1
Current accrued liabilities 6
Other current liabilities 2
Total current liabilities 46
Total liabilities 46
The non-recurring fair value measurement for the disposal group has been categorised as a Level 3 fair
value. The fair value is based on the sale and purchase agreement for the Rockport business which was
signed on January 23, 2015 SE E N OT E 03 .
Depreciation expenses were € 279 million and € 258 million for the years ending December 31, 2015 and
2014, respectively SE E N OT E 31 .
2 06
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
As a general principle, it is regularly assessed whether there are any indications that furniture and fixtures
might be impaired. Irrespective of the existence of such indications, furniture and fixtures in own-retail
stores are annually tested for impairment whereby the recoverable amount is calculated using the
discounted cash flow method as part of determining the profitability of the respective own-retail stores.
Impairment losses amounted to € 19 million and € 17 million for the years ending December 31, 2015 and
2014, respectively SEE N OT E 31 . These are related to other equipment, furniture and fixtures as well as
buildings and leasehold improvements, mainly in the Group’s own-retail activities, for which contrary to
expectations there will be an insufficient flow of future economic benefits. In 2015, reversals of impairment
losses were recorded in an amount of € 1 million (2014: € 1 million).
The increase in ‘Land, land leases, buildings and leasehold improvements’ mainly relates to the
acquisition of a warehouse in Chekhov, Russia, which was previously leased.
For details see Attachment I to the consolidated financial statements SEE STATEMENT OF MOVEMENTS
OF IN TAN GIBLE AN D TAN G I B LE ASSE T S, P. 24 8 .
13 Goodwill primarily relates to the Group’s acquisitions of the Reebok, TaylorMade and Runtastic businesses
GOODWILL as well as acquisitions of subsidiaries, primarily in the USA, Australia/New Zealand, the Netherlands,
Denmark and Italy.
GOODWILL
The majority of goodwill, which primarily relates to the acquisition of the Reebok business in 2006, is
denominated in US dollars. A currency translation effect of positive € 65 million and positive € 73 million
was recorded for the years ending December 31, 2015 and 2014, respectively.
The Group determines whether goodwill impairment is necessary at least on an annual basis. The
impairment test for goodwill is performed based on cash-generating units which represent the lowest
level within the Group at which goodwill is monitored for internal management purposes. This requires
an estimation of the recoverable amount of the cash-generating units to which the goodwill is allocated.
The recoverable amount of a cash-generating unit is determined on the basis of value in use. Estimating
the value in use requires the Group to make an estimate of the expected future cash flows from the
cash-generating units and also to choose a suitable discount rate in order to calculate the present value
of those cash flows.
This calculation uses cash flow projections based on the financial planning covering a five-year period
in total. The planning is based on long-term expectations of the adidas Group and reflects in total for the
cash-generating units an average annual mid- to high-single-digit sales increase with varying forecasted
growth prospects for the different units. Furthermore, the Group expects the operating margin to expand,
primarily driven by an improvement in the gross margin as well as lower operating expenses as a percentage
of sales. The planning for capital expenditure and working capital is primarily based on past experience.
The planning for future tax payments is based on current statutory corporate tax rates of the individual
cash-generating units. Cash flows beyond this five-year period are extrapolated using steady growth rates
of 1.7% (2014: 1.7%). According to the Group’s expectations, these growth rates do not exceed the long-term
average growth rate of the business sector in which each cash-generating unit operates.
2 07
4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Discount rates are based on a weighted average cost of capital calculation considering a five-year average
market-weighted debt/equity structure and financing costs referencing the Group’s major competitors for
each cash-generating unit. The discount rates used are after-tax rates and reflect the specific equity and
country risk of the relevant cash-generating unit.
Due to the implementation of an omni-channel distribution approach in connection with the new
organisational structure and the associated change in segmental reporting, the carrying amounts of
acquired goodwill have been reallocated to the new groups of cash-generating units.
The groups of cash-generating units are defined as the regional markets which are responsible for the
joint distribution of adidas and Reebok as well as the other operating segments TaylorMade-adidas Golf,
Reebok-CCM Hockey and Runtastic. The regional markets are: Western Europe, North America, Greater
China, Russia/CIS, Latin America, Japan, Middle East, South Korea and Southeast Asia/Pacific.
Due to the cessation of the subdivision into the distribution channels Wholesale and Retail in the
regional markets as well as the consolidation of the former markets Brazil and SLAM (Latin America
excluding Brazil) into the new market Latin America, the number of groups of cash-generating units to
which goodwill is allocated decreased from 22 to 11 compared to December 31, 2014. This did not result
in a new composition of cash-generating units. However, the monitoring of goodwill is not performed
on the same level anymore. Through the acquisition of runtastic GmbH, the number of cash-generating
units increased to 12.
The allocation of goodwill to the new groups of cash-generating units was performed in the first quarter
of 2015 by aggregating goodwill so far allocated to Wholesale and Retail within the regional markets.
Due to the change in the composition of the Group’s operating segments and associated cash-generating
units respectively, the Group assessed in the first quarter of 2015 whether goodwill impairment was
required. The underlying value drivers and key assumptions for impairment testing purposes remained in
principle unchanged compared to the impairment test performed for the consolidated financial statements
at December 31, 2014. Goodwill impairment losses in the first quarter of 2015 amounted to € 18 million. Due
to the consolidation of the groups of cash-generating units Retail SLAM and Retail Brazil with Wholesale
SLAM and Wholesale Brazil as well as Retail Russia/CIS with Wholesale Russia/CIS, the carrying amount
of the respective new groups of cash-generating units Latin America and Russia/CIS was determined
to be higher than the recoverable amount of € 438 million and € 130 million, respectively. The goodwill
impairment amount comprises impairment losses of € 15 million within the segment Latin America and
€ 3 million within the segment Russia/CIS.
Goodwill arising from a preliminary purchase price allocation in connection with the Runtastic acquisition
was allocated to the groups of cash-generating units of the regional markets based on the expected
synergy potential.
In the course of the annual impairment test, the Group assessed whether goodwill impairment was
required. In this context, goodwill impairment losses amounted to € 16 million. The goodwill impairment
amount comprises impairment losses of € 1 million within the segment North America, € 3 million within
the segment Russia/CIS and € 13 million within the segment Latin America. Goodwill allocated to these
groups of cash-generating units was completely impaired. Goodwill allocated to the cash-generating unit
Reebok-CCM Hockey was already fully impaired at December 31, 2014.
2 08
4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
In total, goodwill impairment losses of € 34 million were recognised in 2015 (2014: € 78 million).
The carrying amounts of acquired goodwill allocated to the respective cash-generating units and the
respective discount rates applied to the cash flow projections are as follows:
ALLOCATION OF GOODWILL
Dec. 31, 2015 Jan. 1, 2015 Dec. 31, 2015 Jan. 1, 2015
‘Other’ comprises the groups of cash-generating units for which the respective carrying amount of allocated
goodwill is not significant in comparison with the Group’s total carrying amount of goodwill.
A change in the discount rate by up to approximately 3.9 percentage points or a reduction of planned
free cash inflows by up to approximately 50% would not result in any additional impairment requirement.
Future changes in expected cash flows and discount rates may lead to impairments of the reported
goodwill in the future.
For details see Attachment I to the consolidated financial statements SEE STATEMENT OF MOVEMENTS
OF IN TAN GIBLE AN D TAN G I B LE ASSE T S, P. 24 8 .
2 09
4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
At December 31, 2015, trademarks, mainly related to the acquisition of Reebok International Ltd. (USA)
in 2006, Ashworth, Inc. in 2008 and runtastic GmbH in 2015, have indefinite useful lives. This is due to the
expectation of permanent use of the acquired brand names.
Other trademarks mainly relate to the brand names Ashworth, Adams Golf, Five Ten and Runtastic.
The Group tests at least on an annual basis whether trademarks with indefinite useful lives are impaired.
This requires an estimation of the fair value less costs to sell of the trademarks. As part of this estimation,
the Group is required to make an estimate of the expected future trademark-specific sales and appropriate
arm’s length notional royalty rates and also to choose a suitable discount rate in order to calculate the
present value of those cash flows.
During the impairment test for trademarks, the recoverable amount is determined on the basis of fair
value less costs to sell (costs to sell are calculated with 1% of the fair value). The fair value is determined
by discounting notional royalty savings after tax and adding a tax amortisation benefit, resulting from the
amortisation of the acquired asset (‘relief-from-royalty method’). These calculations use projections of
net sales related royalty savings, based on financial planning which covers a period of five years in total.
The level of the applied royalty rate for the determination of the royalty savings is based on contractual
agreements between the adidas Group and external licensees as well as publicly available royalty rate
agreements for similar assets. Notional royalty savings beyond this period are extrapolated using steady
growth rates of 1.7% (2014: 1.7%). The growth rates do not exceed the long-term average growth rate of
the business to which the trademarks are allocated.
The discount rate is based on a weighted average cost of capital calculation derived using a five-year
average market-weighted debt/equity structure and financing costs referencing the Group’s major
competitors. The discount rate used is an after-tax rate and reflects the specific equity and country risk.
The applied discount rate depends on the respective intangible asset being valued and ranges between
6.8% and 8.4% (2014: between 6.7% and 8.4%).
The adidas Group determined that there was no impairment necessary for any of its trademarks
with indefinite useful lives in the years ending December 31, 2015 and 2014. In addition, an increase
in the discount rate of up to approximately one percentage point or a reduction of cash inflows of up to
approximately 13% would not result in any impairment requirement. However, future changes in expected
cash flows and discount rates may lead to impairments of the accounted trademarks in the future.
As part of the goodwill impairment test, the Reebok trademark is allocated on a pro rata basis to the
cash-generating units. Thereof, the major shares relate to North America (€ 361 million), Western Europe
(€ 312 million), Russia/CIS (€ 239 million) and Latin America (€ 189 million).
Amortisation expenses for intangible assets with definite useful lives were € 60 million and € 58 million
for the years ending December 31, 2015 and 2014, respectively SE E N OT E 31 .
For details see Attachment I to the consolidated financial statements SEE STATEMENT OF MOVEMENTS
OF IN TAN GIBLE AN D TAN G I B LE ASSE T S, P. 24 8 .
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
15 Long-term financial assets primarily include an 8.33% investment in FC Bayern München AG (2014: 8.33%)
LONG-TERM of € 81 million (2014: € 80 million). This investment is classified as ‘fair value through profit or loss’ and
FINANCIAL ASSETS recorded at fair value. This equity security does not have a quoted market price in an active market.
Therefore, existing contractual arrangements were used in order to calculate the fair value as at
December 31, 2015.
The line item ‘Investments and other financial assets’ comprises the shares in Immobilieninvest und
Betriebsgesellschaft Herzo-Base GmbH & Co. KG as well as other minority shareholdings amounting to
€ 22 million (2014: € 16 million) which are classified as ‘Available-for-sale’ and measured at amortised cost
as a reliable determination of the fair value is impossible without having concrete negotiations regarding a
sale. These shares are unlisted and do not have an active market. There is no intention to sell these shares.
Additionally, long-term financial assets include investments which are mainly invested in insurance
products and are measured at fair value, as well as other financial assets.
Currency options 20 10
Forward exchange contracts 2 5
Security deposits 26 27
Promissory notes 42 –
Sundry 10 0
Other non-current financial assets 99 42
For further information about currency options and forward exchange contracts S E E N OT E 2 9 . For
information about promissory notes SE E N OT E 03 .
Prepaid expenses mainly include prepayments for long-term promotion contracts and rents SE E NOTE S
38 AN D 28 .
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
18 Borrowings are denominated in a variety of currencies in which the Group conducts its business. The
BORROWINGS AND largest portions of effective gross borrowings (before liquidity swaps for cash management purposes) as at
CREDIT LINES December 31, 2015 are denominated in euros (2015: 80%; 2014: 80%) and US dollars (2015: 15%; 2014: 12%).
The weighted average interest rate on the Group’s gross borrowings decreased to 2.4% in 2015
(2014: 3.1%).
As at December 31, 2015, the Group had cash credit lines and other long-term financing arrangements
totalling € 3.7 billion (2014: € 3.7 billion); thereof unused credit lines accounted for € 1.9 billion
(2014: € 1.8 billion). In addition, as at December 31, 2015, the Group had separate lines for the issuance of
letters of credit and guarantees in an amount of approximately € 0.2 billion (2014: € 0.2 billion).
The Group’s outstanding financings are unsecured and may include standard financial covenants, which
are reviewed on a quarterly basis. These covenants may include limits on the disposal of fixed assets, the
maximum amount of debt secured by liens, cross default provisions and change of control. In addition,
certain financial arrangements contain equity ratio covenants, minimum equity covenants as well as net
loss covenants.
As at December 31, 2015, and December 31, 2014, shareholders’ equity and the equity ratio were well
above the agreed minimum values. Likewise, the relevant amount of net income clearly exceeded net loss
covenants.
The amounts disclosed as gross borrowings represent outstanding borrowings under the following
arrangements with aggregated expiration dates as follows:
The above table includes two Eurobonds amounting to € 1 billion in total issued on October 1, 2014.
The seven-year Eurobond of € 600 million matures on October 8, 2021 and has a coupon of 1.25%. The
twelve-year Eurobond of € 400 million matures on October 8, 2026 and has a coupon of 2.25%. The
Eurobonds have denominations of € 1,000 each and were priced with a spread of 68 basis points and
100 basis points, respectively, above the corresponding euro mid-swap rate. The issue price was fixed at
99.145% and 99.357%, respectively.
In addition, gross borrowings include a convertible bond for an aggregate nominal amount of € 500 million
divided into denominations of € 200,000 which was issued on March 21, 2012. The bond has a maximum
maturity (including prolongation options) until June 14, 2019. The coupon of the bond amounts to 0.25%
and is payable annually, commencing on June 14, 2013. The bond is, at the option of the respective holder,
convertible at any time from and including May 21, 2012, up to and including June 5, 2019, into up to
6.10 million new or existing adidas AG shares. The convertible bond has a conversion premium of 40%
above the reference price of € 59.61, which resulted in an initial conversion price of € 83.46 per share. As
a consequence of contractual provisions relating to dividend protection, the conversion price was adjusted
from € 82.56 to € 82.00 per share. This adjustment became effective on May 8, 2015. On June 14, 2017, the
bondholders have the right to call the bond at nominal value plus interest accrued on the nominal amount.
adidas AG is entitled to redeem the remaining bonds in whole if, at any time, the aggregate principal
amount of bonds outstanding falls below 15% of the aggregate principal amount of the bonds that were
initially issued. Furthermore, as of July 14, 2017, adidas AG is entitled to redeem the bonds in whole if on
20 of 30 consecutive trading days, the share price of adidas AG exceeds the current conversion price of
€ 82.00 by at least 30%.
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
According to IAS 32 ‘Financial Instruments: Presentation’, the conversion right represented in the
convertible bond constitutes a financial instrument which is covered in the capital reserve in an amount of
€ 55 million after deduction of the issuance cost. The initial liability component amounted to € 441 million
after deduction of the issuance cost and is shown within long-term borrowings. The initial difference
of € 59 million compared to the nominal amount of € 500 million is accrued as interest expense of the
financial liability over the expected maturity of the convertible bond using the ‘effective interest method’.
As at December 31, 2015, the financial liability amounted to € 483 million.
The above table includes a private placement which was repaid on July 1, 2015.
For further details on future cash outflows SE E R I SK AN D O P P O RT UN I T Y R E P O RT, P. 156 .
Currency options 2 0
Forward exchange contracts 59 50
Commodity futures – 3
Finance lease obligations 3 3
Sundry 79 35
Other current financial liabilities 143 91
The increase in the line item ‘Sundry’ mainly relates to purchase price obligations for non-controlling
interests. For further information about currency options, forward exchange contracts and commodity
futures SE E N OTE 2 9 . For information about finance lease obligations SE E N OT E 28 .
€ in millions Jan. 1, Currency Usage Reversals Additions Transfers Dec. 31, Thereof
2015 translation 2015 non-
differences current
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4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
€ in millions Jan. 1, Currency Usage Reversals Changes in Additions Transfers Dec. 31, Thereof
2015 translation companies 2015 non-
differences consoli- current
dated
Marketing accrued liabilities mainly consist of accruals for distribution, such as discounts, rebates and
sales commissions.
Accrued liabilities for personnel mainly consist of accruals for outstanding salary payments, such as
bonuses and overtime, as well as outstanding vacation.
Sundry accrued liabilities mainly include accruals for promotion contracts as well as accruals for
interest.
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
The increase in the line item ‘Sundry’ mainly relates to the earn-out components for Runtastic. For further
information about currency options and forward exchange contracts S E E N OT E 2 9 . For information
about finance lease obligations S E E N OT E 28 . For further information about earn-out components
SE E N OTE 04 .
24 The Group has recognised post-employment benefit obligations arising from defined benefit plans. The
PENSIONS benefits are provided pursuant to the legal, fiscal and economic conditions in each respective country and
AND SIMILAR mainly depend on the employees’ years of service and remuneration.
OBLIGATIONS
PENSIONS AND SIMILAR OBLIGATIONS
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
In Germany, adidas AG grants its employees contribution-based and final salary defined benefit pension
schemes, which provide employees with entitlements in the event of retirement, disability and death. In
general, German pension plans operate under the legal framework of the German Company Pensions Act
(‘Betriebsrentengesetz’) and under the German Labour Act. A large proportion of the pension plans are
closed to new entrants. New employees are entitled to benefits in accordance with the adidas Pension
Plan or the adidas Management Pension Plan. The adidas Pension Plan is a matching contribution plan;
the contributions to this pension plan are partly paid by the employee and partly paid by the employer.
The contributions are transferred into benefit building blocks. The benefits are paid out in the form of a
pension, a lump sum or instalments. The pension plans in Germany are financed using book reserves, a
contractual trust arrangement (CTA) and a pension fund (‘Pensionsfonds’) in combination with a reinsured
provident fund (‘Unterstützungskasse’) for certain current and former members of the Executive Board of
adidas AG. Further details about the pension entitlements of members of the Executive Board of adidas AG
are contained in the Compensation Report SE E CO M P E N SAT I O N R E P O RT, P. 36 .
The final salary defined benefit pension scheme in the UK is closed to new entrants and to future accrual.
The benefits are mainly paid out in the form of pensions. The scheme operates under UK trust law as well
as under the jurisdiction of the UK Pensions Regulator and therefore is subject to a minimum funding
requirement. The Trustee Board is responsible for setting the scheme’s funding objective, agreeing the
contributions with the company and determining the investment strategy of the scheme.
The subsidiaries in South Korea grant a final pay pension plan to certain employees. This plan is closed
to new entrants. The benefits are paid out in the form of a lump sum. The pension plan operates under the
Employee Retirement Benefit Security Act (ERSA). This regulation requires a minimum funding amounting
to 80% of the present value of the vested benefit obligation. Both subsidiaries annually contribute at least
the minimum amount in order to meet the funding requirements.
The defined benefit plan in Japan was closed effective as of March 31, 2015 and a new defined contribution
plan was established. For each employee, the present value of the entitlement from the defined benefit
plan was calculated as at March 31, 2015. The employees can opt either to transfer the calculated lump
sum to the new defined contribution plan over a four-year period (until 2019) or to receive the lump sum
when leaving the company. Future accruals can only be made through the defined contribution plan. Due to
this change, the respective defined benefit obligation according to IAS 19 largely ceased at the end of 2015.
BREAKDOWN OF THE PRESENT VALUE OF THE OBLIGATION ARISING FROM DEFINED BENEFIT
PENSION PLANS IN THE MAJOR COUNTRIES
The Group’s pension plans are subject to risks from changes in actuarial assumptions, such as the discount
rate, salary and pension increase rates, and risks from changes in longevity. A lower discount rate results
in a higher defined benefit obligation and/or in higher contributions to the pension funds. Lower than
expected performance of the plan assets could lead to an increase in required contributions or to a decline
of the funded status.
The following tables analyse the defined benefit plans, plan assets, present values of the defined benefit
pension plans, expenses recognised in the consolidated income statement, actuarial assumptions and
further information.
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Present value of funded obligation from defined benefit pension plans 394 391
Fair value of plan assets (173) (157)
Funded status 221 234
Present value of unfunded obligation from defined benefit pension plans 25 37
Asset ceiling effect 0 0
Net defined benefit liability 246 271
Thereof: liability 247 271
Thereof: adidas AG 206 212
Thereof: asset (0) (0)
Thereof: adidas AG – –
The determination of assets and liabilities for defined benefit plans is based upon statistical and actuarial
valuations. In particular, the present value of the defined benefit obligation is driven by financial variables
(such as the discount rates or future increases in salaries) and demographic variables (such as mortality
and employee turnover). The actuarial assumptions may differ significantly from the actual circumstances
and could lead to different cash flows.
The weighted average actuarial assumptions as at the balance sheet date are used to determine the defined
benefit liability at that date and the pension expense for the upcoming financial year.
The actuarial assumptions for withdrawal and mortality rates are based on statistical information
available in the various countries. In Germany, the Heubeck 2005 G mortality tables are used. In the UK,
assumptions are based on the S1NA base table with modified improvement of the life expectancy mortality
tables. In South Korea, the KIDI 2015 tables from the Korean Insurance Development Institute are used.
As in the previous year, the calculation of the pension liabilities in Germany is based on a discount rate
determined using the ‘Mercer Yield Curve (MYC)’ approach. With effect from June 30, 2015, all relevant
information for deriving the MYC is obtained from a single data provider (Thomson Reuter’s Datastream)
with the result that bond and rating information is sourced from two rating agencies instead of three. If
the discount rate were determined based on the MYC without changes, the discount rate would be higher
by approximately ten basis points and the defined benefit obligation would be approximately € 6 million
lower than the reported defined benefit obligation.
Remeasurements, such as gains or losses arising from changes in the actuarial assumptions for defined
benefit pension plans during the financial year or a return on the plan assets exceeding the interest income,
are immediately recognised outside the income statement as a change in other reserves in the consolidated
statement of comprehensive income.
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4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Of the total pension expenses recorded in the consolidated income statement, an amount of € 14 million
(2014: € 17 million) relates to employees of adidas AG, € 0.5 million (2014: € 0.2 million) relates to
employees in the UK and € 3 million (2014: € 2 million) relates to employees in South Korea. The gain on
plan settlements in an amount of € 4 million derives from the changes in the pension plans in Japan as
described above. The pension expense is mainly recorded within other operating expenses. The production-
related part of the pension expenses is recognised within cost of sales.
The payments for plan settlements in an amount of € 12 million result from the changes in the pension
plans in Japan as described above.
In the following table, the effects of reasonably conceivable changes in the actuarial assumptions on the
present value of the obligation from defined benefit pension plans are analysed. In addition, for Germany,
the UK and South Korea the average duration of the obligation is shown.
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4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Since many pension plans are closed to future accrual or are not dependent on the salary, the salary
trend plays a minor role in determining pension obligations. Due to the fact that about half of the benefits
of the German pension plans are paid as lump sums or instalment payments, the pension increase rate
and the mortality assumption have significantly less impact than the discount rate when calculating the
pension obligations.
Approximately 92% (2014: 92%) of the total plan assets are allocated to plan assets in the UK (2015: 30%,
2014: 26%), Germany (2015: 56%, 2014: 59%) and South Korea (2015: 6%, 2014: 6%).
Part of the plan assets in Germany is held by a trustee under a Contractual Trust Arrangement (CTA) for
the purpose of funding the pension obligations of adidas AG and insolvency insurance with regard to part
of the pension obligations of adidas AG. The trustee is the registered association adidas Pension Trust e.V.
The investment committee of the adidas Pension Trust determines the investment strategy with the goal
to match the pension liabilities as far as possible and to generate a sustainable return. In August 2014, an
amount of € 65 million in cash was transferred to the trustee. The plan assets in the registered association
are mainly invested in equity index funds, hybrid bonds, fixed and variable interest rate bonds and money
market funds. Another part of the plan assets in Germany is invested in insurance contracts via pension
funds or provident funds. For this portion, an insurance company is responsible for the determination and
the implementation of the investment strategy.
In the UK, the plan assets are held under trust within the pension fund. In 2015, an additional employer
contribution in an amount of € 7 million was paid into the pension fund in order to increase the funding
ratio. The investment strategy is aligned with the structure of the pension obligations in these countries.
In the rest of the world, the plan assets consist predominantly of insurance contracts.
The expected payments for the 2016 financial year amount to € 13 million. Thereof, € 7 million relates
to benefits directly paid to pensioners by the Group companies and € 5 million to employer contributions
paid into the plan assets. In 2015, the actual return on plan assets was € 5 million (2014: € 6 million).
219
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
All equities and bonds are traded freely and have a quoted market price in an active market.
At each balance sheet date, the company analyses the over- or underfunding and, where appropriate,
adjusts the composition of plan assets.
26 The nominal capital of adidas AG has remained unchanged since December 31, 2014. As at the balance
SHAREHOLDERS’ sheet date, and in the period beyond, up to and including February 15, 2016, it amounted to € 209,216,186
EQUITY divided into 209,216,186 registered no-par-value shares (‘registered shares’) and is fully paid in.
Each share grants one vote and is entitled to dividends starting from the beginning of the year it was
issued. Treasury shares held directly or indirectly are not entitled to dividend payment in accordance with
§ 71b German Stock Corporation Act (Aktiengesetz – AktG). At the balance sheet date, and in the period
beyond, up to and including February 15, 2016, the company holds 9,018,769 treasury shares, corresponding
to a notional amount of € 9,018,769 in the nominal capital and consequently 4.31% of the nominal capital.
Authorised Capital
The Executive Board of adidas AG did not utilise the existing amounts of authorised capital of up to
€ 95 million in the 2015 financial year or in the period beyond the balance sheet date up to and including
February 15, 2016.
The following overview of the existing amounts of authorised capital refers to § 4 sections 2, 3 and 4 of
the Articles of Association and consequently does not include the Authorised Capital 2013/II cancelled by
the Annual General Meeting on May 7, 2015, which had also not been utilised up to May 7, 2015.
The authorised capital of the company entitles the Executive Board, subject to Supervisory Board
approval, to increase the nominal capital
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4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Contingent Capital
The following description of the Contingent Capital is based on § 4 sections 5 and 6 of the Articles of
Association of the company as well as on the underlying resolutions of the Annual General Meeting held
on May 6, 2010 and May 8, 2014. Additional contingent capital does not exist.
221
4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
222
4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
On March 6, 2015, the share buyback programme was resumed in the form of a second tranche. In March
2015, 1,140,735 shares were repurchased for an average price of € 71.15, corresponding to a notional
amount of € 1,140,735 in the nominal capital and consequently to 0.55% of the nominal capital. In April
2015, the company repurchased 1,032,568 shares for an average price of € 75.07, corresponding to a
notional amount of € 1,032,568 in the nominal capital and consequently to 0.49% of the nominal capital.
On April 9, 2015, adidas AG (including the shares repurchased in 2014) exceeded the reportable threshold
of 3% of the shares in adidas AG as defined by § 26 section 1 sentence 2 German Securities Trading Act
(Wertpapierhandelsgesetz – WpHG). The share of voting rights amounted to 3.002% (6,281,429 shares) at that
time. In May 2015, the company repurchased 913,606 shares at an average price of € 74.11, corresponding
to a notional amount of € 913,606 in the nominal capital and consequently to 0.44% of the nominal capital.
Between June 1, 2015 and June 15, 2015, 1,042,718 shares were repurchased for an average price of € 70.60,
corresponding to a notional amount of € 1,042,718 in the nominal capital and consequently to 0.50% of the
nominal capital. On June 15, 2015, the second tranche of the share buyback programme was concluded.
Under the granted authorisation, adidas AG repurchased a total of 4,129,627 shares for a total price of
€ 299,999,992 (excluding incidental purchasing costs), i.e. for an average price of € 72.65 per share, in
a second tranche between March 6, 2015 and June 15, 2015. This corresponded to a notional amount of
€ 4,129,627 in the nominal capital and consequently to 1.97% of the nominal capital. The company reserves
the right to continue with or to resume the share buyback programme in the future in alignment with the
published parameters. For details SE E D I SC LO SUR E S P URSUAN T TO § 315 SEC T I O N 4 AN D § 289 SEC TI O N 4
OF TH E GE RMAN COMME RC I AL CO D E , P. 134 .
longer be up to date.
Notifying party Date of reaching, exceeding Reporting threshold Attributions in accordance Shareholdings Number of
or falling below with WpHG in % voting rights
BlackRock, Inc., Wilmington, DE, USA 1 February 10, 2016 Exceeding 5% §§ 22, 25 sec. 1 no. 1 6.85 14,336,927
Albert Frère / Desmarais Family Trust, January 14, 2016 Exceeding 5% § 22 5.0001 10,461,000
Montréal, Canada 2
FMR LLC, Wilmington, DE, USA 3 December 2, 2015 Exceeding 3% § 22 3.27 6,842,201
Capital Research and Management Company, July 22, 2015 Exceeding 3% § 22 sec. 1 sent. 1 no. 6 3.02 6,325,110
Los Angeles, CA, USA 4
The Capital Group Companies, Inc., July 22, 2015 Exceeding 3% § 22 sec. 1 sent. 1 no. 6 3.02 6,325,110
Los Angeles, CA, USA 5 in conjunction with § 22
sec. 1 sent. 2 and 3
adidas AG, Herzogenaurach, Germany 6 April 9, 2015 Exceeding 3% 3.002 6,281,429
O. Mason Hawkins, USA 7 March 24, 2015 Exceeding 3% § 22 sec. 1 sent. 1 no. 6 3.01 6,298,523
in conjunction with § 22
sec. 1 sent. 2
Southeastern Asset Management, Inc., March 24, 2015 Exceeding 3% § 22 sec. 1 sent. 1 no. 6 3.01 6,298,523
Memphis, TN, USA 7
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Capital management
The Group’s policy is to maintain a strong capital base so as to uphold investor, creditor and market
confidence and to sustain future development of the business.
The Group seeks to maintain a balance between a higher return on equity that might be possible with
higher levels of borrowings and the advantages and security afforded by a sound capital position. The Group
further aims to maintain net debt below two times EBITDA over the long term.
Financial leverage amounts to 8.1% and is defined as the ratio between net borrowings (short- and
long-term borrowings less cash and cash equivalents as well as short-term financial assets) in an amount
of € 460 million (2014: € 185 million) and shareholders’ equity in an amount of € 5.666 billion (2014:
€ 5.624 billion). EBITDA (continuing operations) amounted to € 1.475 billion for the financial year ending
December 31, 2015 (2014: € 1.283 billion). The ratio between net borrowings and EBITDA (continuing
operations) amounted to 0.3 for the financial year ending December 31, 2015 (2014: 0.1).
Reserves
Reserves within shareholders’ equity are as follows:
•• Capital reserve: primarily comprises the paid premium for the issuance of share capital as well as the
equity component of issued convertible bonds.
•• Cumulative currency translation differences: comprise all foreign currency differences arising from
the translation of the financial statements of foreign operations.
•• Hedging reserve: comprises the effective portion of the cumulative net change in the fair value of
cash flow hedges related to hedged transactions that have not yet occurred as well as of hedges of net
investments in foreign subsidiaries.
•• Other reserves: comprise the remeasurements of defined benefit plans [consisting of the cumulative
net change of actuarial gains or losses relating to the defined benefit obligations, the return on plan
assets (excluding interest income) and the asset ceiling effect] as well as expenses recognised for share
option plans and effects from the acquisition of non-controlling interests.
•• Retained earnings: comprise the accumulated profits less dividends paid as well as considerations
paid for the repurchase of treasury shares exceeding the nominal value.
2 24
4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
27 This line item within equity comprises the non-controlling interests in several subsidiaries which are not
NON-CONTROLLING directly or indirectly attributable to adidas AG.
INTERESTS Non-controlling interests are assigned to six subsidiaries as at December 31, 2015 and 2014, respectively
SEE ATTAC H ME N T II TO T HE CO N SO LI DAT E D FI N AN C I AL STAT E M E N T S ( SE E SHAR E HO LD I N G S O F AD I DAS AG,
For the following subsidiaries with non-controlling interests the main financial information is presented
combined.
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4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
The following table presents the main financial information on subsidiaries with non-controlling interests.
Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2014
Current assets 98 86
Non-current assets 17 15
Current liabilities (76) (121)
Non-current liabilities (1) (1)
Net assets 38 (20)
Net assets attributable to
non-controlling interests (8) (7) (0) (0) (8) (7)
Reclassification of non-controlling
interests in accordance with
IAS 32 (10) –
Net assets attributable to
non-controlling interests
according to the consolidated
statement of financial position (18) (7)
28 Operating leases
LEASING The Group leases primarily retail stores as well as offices, warehouses and equipment. The contracts
AND SERVICE regarding these leases with expiration dates of between 1 and 22 years partly include renewal options and
ARRANGEMENTS escalation clauses. Rent expenses (continuing operations), which partly depend on net sales, amounted to
€ 680 million and € 643 million for the years ending December 31, 2015 and 2014, respectively.
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Future minimum lease payments for minimum lease durations on a nominal basis are as follows:
Finance leases
The Group also leases various premises for administration and warehousing which are classified as finance
leases.
The net carrying amount of these assets of € 8 million and € 10 million was included in property, plant
and equipment as at December 31, 2015 and 2014, respectively. For the year ending December 31, 2015,
interest expenses (continuing operations) were € 0 million (2014: € 0 million) and depreciation expenses
(continuing operations) were € 4 million (2014: € 4 million).
Minimum lease payments for finance leases in 2015 include land leases with a remaining lease term
of 97 years. The minimum lease payments under these contracts amount to € 12 million. The estimated
amount representing interest is € 9 million and the present value amounts to € 2 million.
The net present values and the minimum lease payments under these contracts over their remaining
terms up to 2018 and the land leases with a remaining lease term of 97 years are as follows:
Service arrangements
The Group has outsourced certain logistics and information technology functions, for which it has entered
into long-term contracts. Financial commitments under these contracts mature as follows:
Within 1 year 97 75
Between 1 and 5 years 253 101
After 5 years 0 18
Total 349 193
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
29
FINANCIAL INSTRUMENTS
CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS AS AT DECEMBER 31, 2015, ACCORDING TO CATEGORIES OF IAS 39
AND THEIR FAIR VALUES
Financial assets
Cash and cash equivalents n.a. 1,365 1,365 1,365
Short-term financial assets FAHfT 5 5 5
Accounts receivable LaR 2,049 2,049 2,049
Other current financial assets
Derivatives being part of a hedge n.a. 179 179 179
Derivatives not being part of a hedge FAHfT 28 28 28
Other financial assets LaR 160 160 161
Long-term financial assets
Other equity investments FAHfT 81 81 81
Available-for-sale financial assets AfS 58 22 36 58
Loans LaR 1 1 1
Other non-current financial assets
Derivatives being part of a hedge n.a. 2 2 2
Derivatives not being part of a hedge FAHfT 20 20 20
Promissory notes AfS 42 42 42
Other financial assets LaR 36 36 36
Assets classified as held for sale LaR 0 0 0
Financial liabilities
Short-term borrowings
Bank borrowings FLAC 229 229 229
Private placements FLAC 138 138 138
Eurobond FLAC – – –
Convertible bond FLAC – – –
Accounts payable FLAC 2,024 2,024 2,024
Current accrued liabilities FLAC 596 596 596
Other current financial liabilities
Derivatives being part of a hedge n.a. 36 36 36
Derivatives not being part of a hedge FLHfT 25 25 25
Other financial liabilities FLAC 79 79 79
Finance lease obligations n.a. 3 3 3
Long-term borrowings
Bank borrowings FLAC – – –
Private placements FLAC – – –
Eurobond FLAC 981 981 997
Convertible bond FLAC 483 483 629
Non-current accrued liabilities FLAC 14 14 14
Other non-current financial liabilities
Derivatives being part of a hedge n.a. – –
Derivatives not being part of a hedge FLHfT 0 0 0
Other financial liabilities FLAC 12 12 12
Finance lease obligations n.a. 6 6 6
Earn-out components n.a. 21 21 21
Liabilities classified as held for sale FLAC 0 0 0
228
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS AS AT DECEMBER 31, 2014, ACCORDING TO CATEGORIES OF IAS 39
AND THEIR FAIR VALUES
Financial assets
Cash and cash equivalents n. a. 1,683 1,683 1,683
Short-term financial assets FAHfT 5 5 5
Accounts receivable LaR 1,946 1,946 1,946
Other current financial assets
Derivatives being part of a hedge n. a. 224 224 224
Derivatives not being part of a hedge FAHfT 46 46 46
Other financial assets LaR 128 128 128
Long-term financial assets
Other equity investments FAHfT 80 80 80
Available-for-sale financial assets AfS 49 16 33 49
Loans LaR 0 0 0
Other non-current financial assets
Derivatives being part of a hedge n. a. 5 5 5
Derivatives not being part of a hedge FAHfT 10 10 10
Other financial assets LaR 27 27 27
Assets classified as held for sale LaR 51 51 51
Financial liabilities
Short-term borrowings
Bank borrowings FLAC 194 194 194
Private placements FLAC 95 95 100
Eurobond FLAC – – –
Convertible bond FLAC – – –
Accounts payable FLAC 1,652 1,652 1,652
Current accrued liabilities FLAC 500 500 500
Other current financial liabilities
Derivatives being part of a hedge n. a. 44 44 44
Derivatives not being part of a hedge FLHfT 9 9 9
Other financial liabilities FLAC 35 35 35
Finance lease obligations n. a. 3 3 3
Long-term borrowings
Bank borrowings FLAC – – –
Private placements FLAC 123 123 129
Eurobond FLAC 990 990 1,000
Convertible bond FLAC 471 471 545
Non-current accrued liabilities FLAC 9 9 9
Other non-current financial liabilities
Derivatives being part of a hedge n. a. – – –
Derivatives not being part of a hedge FLHfT 2 2 2
Other financial liabilities FLAC 0 0 0
Finance lease obligations n. a. 7 7 7
Liabilities classified as held for sale FLAC 41 41 41
229
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS ACCORDING TO IFRS 13 AS AT DECEMBER 31, 2015
Level 1 is based on quoted prices in active markets for identical assets or liabilities.
Level 2 is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 is based on inputs for the asset or liability that are not based on observable market data (unobservable inputs).
FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS ACCORDING TO IFRS 13 AS AT DECEMBER 31, 2014
Level 1 is based on quoted prices in active markets for identical assets or liabilities.
Level 2 is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 is based on inputs for the asset or liability that are not based on observable market data (unobservable inputs).
230
4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Due to the short-term maturities of cash and cash equivalents, short-term financial assets, accounts
receivable and payable as well as other current financial receivables and payables, their respective fair
values equal their carrying amount.
The fair values of non-current financial assets and liabilities are estimated by discounting expected
future cash flows using current interest rates for debt of similar terms and remaining maturities and
adjusted by an adidas Group specific credit risk premium.
Fair values of long-term financial assets classified as ‘Available-for-sale’ are based on quoted market
prices in an active market or are calculated as present values of expected future cash flows.
The fair values of currency options, forward exchange contracts and commodity futures are determined
on the basis of market conditions at the balance sheet date. The fair value of a currency option is determined
using generally accepted models to calculate option prices. The fair market value of an option is influenced
not only by the remaining term of the option, but also by other determining factors such as the actual foreign
exchange rate and the volatility of the underlying foreign currency base.
In accordance with IFRS 13, the following tables show the valuation methods used in measuring Level 1,
Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.
Convertible bond The fair value is based on the market price of the convertible Not applicable FLAC
bond as at December 31, 2015.
Eurobond The fair value is based on the market price of the Eurobond as Not applicable FLAC
at December 31, 2015.
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Short-term financial The discounted cash flow method is applied, which considers Not applicable FAHfT
assets the present value of expected payments, discounted using a
risk-adjusted discount rate. Due to their short-term maturities,
it is assumed that their respective fair value is equal to the
notional amount.
Available-for-sale The fair value is based on the market price of the assets as at Not applicable AfS
financial assets December 31, 2015.
Forward exchange For EUR/USD, the adidas Group applies the par method, which Not applicable n.a. respec-
contracts uses actively traded forward rates. For the other currency pairs, tively FAHfT
the zero coupon method is applied. The zero method is a model
for the determination of forward rates based on deposit and
swap interest rates.
Currency options The adidas Group applies the Garman-Kohlhagen model, which Not applicable n.a. respec-
is an extended version of the Black-Scholes model. tively FAHfT
Commodity futures The fair value is determined based on commodity forward Not applicable n.a. respec-
curves, discounted by deposit and swap interest rates. tively FAHfT
Private placements The discounted cash flow method is applied, which considers Not applicable FLAC
the present value of expected payments, discounted using a
risk-adjusted discount rate.
Investment in FC This equity security does not have a quoted market price in See column FAHfT
Bayern München AG an active market. Existing contractual arrangements (based ‘Valuation
on the externally observable dividend policy of FC Bayern method’
München AG) are used in order to calculate the fair value as
at December 31, 2015.
Promissory notes The discounted cash flow method is applied which considers Risk-adjusted The estimated fair value would AfS
the present value of expected payments, discounted using discount rate increase (decrease) if the dividends
a risk-adjusted discount rate. The expected payments were higher (lower) or the risk-
are determined by considering the possible scenarios of adjusted discount rate was lower
forecasted dividends, the amount to be paid under each (higher).
scenario and the probability of each scenario.
Earn-out The discounted cash flow method is applied, which considers Risk-adjusted The estimated fair value would n.a.
components the present value of expected payments, discounted using a discount rate increase (decrease) if EBITDA were
risk-adjusted discount rate. higher (lower) or the risk-adjusted
discount rate were lower (higher).
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Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
Financial assets or financial liabilities at fair value through profit or loss (1) (13)
Thereof: designated as such upon initial recognition – –
Thereof: classified as held for trading (1) (13)
Loans and receivables (17) (26)
Available-for-sale financial assets – –
Financial liabilities measured at amortised cost 10 12
Net gains or losses on financial assets or financial liabilities held for trading include the effects from fair
value measurements of the derivatives that are not part of a hedging relationship, and changes in the fair
value of other financial instruments as well as interest payments.
Net gains or losses on loans and receivables comprise mainly impairment losses and reversals.
Net gains or losses on financial liabilities measured at amortised cost include effects from early
settlement and reversals of accrued liabilities.
The disclosures required by IFRS 7 ‘Financial Instruments: Disclosures’, paragraphs 13A to 13F
(‘Offsetting financial assets and financial liabilities’) as well as 31 to 42 (‘Nature and Extent of Risks arising
from Financial Instruments’) can be found in N OT E 07 and the Group Management Report S E E R I S K
AN D OPPORTUN ITY REPORT, P. 156 .
233
4
Consolidated F inancial Statements
Notes – Notes to the Consolidated Statement of Financial Position
The comparatively high amount of forward exchange contracts is primarily due to currency swaps for
liquidity management purposes and hedging transactions.
Of the total amount of outstanding hedges, the following contracts related to the US dollar (i.e. the
biggest single exposure of product sourcing):
FAIR VALUES
A total net fair value of positive € 146 million (2014: positive € 163 million) for forward exchange contracts
related to hedging instruments falling under hedge accounting as per definition of IAS 39 ‘Financial
Instruments: Recognition and Measurement’ was recorded in the hedging reserve. The remaining net fair
value of negative € 2 million (2014: positive € 32 million), mainly related to currency swaps for liquidity
management purposes and to forward exchange contracts hedging intercompany dividend receivables, was
recorded in the income statement. The total fair value of negative € 1 million (2014: positive € 26 million) for
outstanding currency options related to cash flow hedges. This consists of a positive time value of € 1 million
(2014: positive € 0 million) and of a negative time value of € 0 million (2014: negative € 0 million) and, in
contrast to the preceding table above, does not include the intrinsic value of the options.
The fair value adjustments of outstanding cash flow hedges for forecasted sales are reported in
the income statement when the forecasted sales transactions are recorded. The vast majority of these
transactions are forecasted to occur in 2016. At the balance sheet date, inventories were adjusted by
positive € 26 million (2014: negative € 1 million) which will be recognised in the income statement in 2016.
In the hedging reserve, a negative amount of € 56 million (2014: negative € 4 million) is included for
hedging the currency risk of net investments in foreign entities, mainly for the subsidiaries LLC “adidas, Ltd.”
and adidas Sports (China) Co. Ltd. This reserve will remain until the investment in the foreign entity has
been sold. As at December 31, 2015, no ineffective part of the hedges was recorded in the income statement.
In order to determine the fair values of its derivatives that are not publicly traded, the adidas Group
uses generally accepted quantitative financial models based on market conditions prevailing at the balance
sheet date.
In 2015, the fair values of the derivatives were determined applying mainly the ‘par method’, which
uses actively traded forward rates.
234
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Notes – Notes to the Consolidated Income Statement
All figures related to the 2014 and 2015 financial years in the ‘Notes to the consolidated income statement’
refer to the Group’s continuing operations unless otherwise stated.
31 Other operating expenses include expenses for sales, marketing, research and development, as well as
OTHER OPERATING for logistics and central administration. In addition, they include impairment losses as well as depreciation
EXPENSES of tangible assets and amortisation of intangible assets (except goodwill impairment losses), with the
exception of depreciation and amortisation which is included in the cost of sales.
Expenditure for marketing investments is a material component of other operating expenses. The
expenditure for marketing investments consists of promotion and communication spending such as
promotion contracts, advertising, events and other communication activities. However, it does not include
marketing overhead expenses, which are presented in marketing overheads. In 2015, expenditure for
marketing investments accounted for 26% (2014: 25%) of the total other operating expenses.
Expenses for central administration include the functions IT, Finance, Legal, Human Resources,
Facilities & Services as well as General Management.
Depreciation and amortisation expense for tangible and intangible assets (except goodwill impairment
losses) and impairment losses were € 357 million and € 325 million for the years ending December 31,
2015 and 2014, respectively. Thereof, € 3 million and € 2 million were recorded within the cost of sales as
they are directly assigned to the production costs.
235
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Notes – Notes to the Consolidated Income Statement
32 Expenses are presented by function according to the ‘cost of sales method’ in the income statement.
COST BY NATURE Supplementary information on the expenses by nature is detailed below.
Cost of materials
The total cost of materials relating to the amount of inventories recognised as an expense during the period
was € 8.602 billion and € 7.478 billion for the years ending December 31, 2015 and 2014, respectively.
Personnel expenses
Personnel expenses were as follows:
PERSONNEL EXPENSES
Personnel expenses are primarily included within other operating expenses. Personnel expenses which
are directly attributable to the production costs of goods are included within the cost of sales.
FINANCIAL EXPENSES
236
4
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Notes – Notes to the Consolidated Income Statement
Interest income from financial instruments, measured at amortised cost, mainly consists of interest income
from bank deposits and loans.
Interest income/expense from financial instruments at fair value through profit or loss mainly includes
interest payments from investment funds as well as net interest payments from interest derivatives not
being part of a hedging relationship. Unrealised gains/losses from fair value measurement of such financial
assets are shown in other financial income or expenses.
Interest expense on financial instruments measured at amortised cost mainly includes interest on
borrowings and effects from using the ‘effective interest method’.
Interest expense on other provisions and non-financial liabilities particularly includes effects from
measurement of other provisions at present value and interest on non-financial liabilities such as tax
payables.
Other financial expenses include impairment losses on other financial assets amounting to € 1 million
for the year ending December 31, 2015 (2014: € 2 million).
Information regarding the Group’s available-for-sale investments, borrowings and financial instruments
is also included in these Notes SE E N OT E S 0 6, 15, 18 AN D 2 9 .
34 adidas AG and its German subsidiaries are subject to German corporate and trade taxes. For the years
INCOME TAXES ending December 31, 2015 and 2014, the statutory corporate income tax rate of 15% plus a surcharge of
5.5% thereon is applied to earnings. The municipal trade tax is approximately 11.4% of taxable income.
For non-German subsidiaries, deferred taxes are calculated based on tax rates that have been enacted
or substantively enacted by the closing date.
237
4
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Notes – Notes to the Consolidated Income Statement
Gross Group deferred tax assets and liabilities after valuation allowances, but before appropriate offsettings,
are attributable to the items detailed in the table below:
DEFERRED TAXES
Deferred tax assets are recognised only to the extent that the realisation of the related benefit is probable.
For the assessment of probability, in addition to past performance and the respective prospects for the
foreseeable future, appropriate tax structuring measures are also taken into consideration.
Deferred tax assets for which the realisation of the related tax benefits is not probable increased from
€ 524 million to € 653 million for the year ending December 31, 2015. These amounts mainly relate to tax
losses carried forward and unused foreign tax credits of the US tax group, which begin to expire in 2026.
The remaining unrecognised deferred tax assets relate to subsidiaries operating in markets where the
realisation of the related tax benefit is not considered probable.
The Group does not recognise deferred tax liabilities for unremitted earnings of non-German subsidiaries
to the extent that they are expected to be permanently invested in international operations. These earnings,
the amount of which cannot be practicably computed, could become subject to additional tax if they were
remitted as dividends or if the Group were to sell its shareholdings in the subsidiaries.
Tax expenses
Tax expenses are split as follows:
The deferred tax income includes tax income of € 111 million in total (2014: € 24 million) related to the
origination and reversal of temporary differences.
238
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Notes – Notes to the Consolidated Income Statement
The effective tax rate of the Group differs from an assumed tax rate of 30% for the year ending
December 31, 2015 as follows:
Year ending Dec. 31, 2015 Year ending Dec. 31, 2014
€ in millions in % € in millions in %
For 2015 and 2014, the effective tax rate is affected by non-tax-deductible goodwill impairment losses.
Excluding the goodwill impairment losses, the effective tax rate is 32.9% and 29.7%, respectively.
For 2015, the line item ‘Losses for which benefits were not recognisable and changes in valuation
allowances’ mainly relates to changes in valuation allowances of the US tax group.
For 2015, the line item ‘Changes in tax rates’ mainly reflects a UK tax rate reduction effective in 2015.
35 Basic earnings per share from continuing operations are calculated by dividing the net income from
EARNINGS PER continuing operations attributable to shareholders by the weighted average number of shares outstanding
SHARE during the year, excluding ordinary shares purchased by the adidas Group and held as treasury shares.
Basic earnings per share from continuing and discontinued operations are calculated by dividing the
net income attributable to shareholders by the weighted average number of shares outstanding during the
year, excluding ordinary shares purchased by the adidas Group and held as treasury shares.
It is not necessary to include 6.1 million dilutive potential shares arising from the convertible bond
issuance in March 2012 in the calculation of diluted earnings per share in 2015 as the conversion right does
not have any value as at the balance sheet date SE E N OT E 18 . The average share price reached € 73.07
per share during 2015 and thus did not exceed the conversion price of € 82.00 per share. As a consequence
of contractual provisions relating to dividend protection, the conversion price was adjusted from € 82.56
to € 82.00 per share. This adjustment became effective on May 8, 2015.
239
4
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Notes – Additional Information
For further information on basic and diluted earnings per share from discontinued operations
SE E N OTE 03 .
ADDITIONAL INFORMATION
36 The Group operates predominantly in one industry segment – the design, distribution and marketing of
SEGMENTAL athletic and sports lifestyle products.
INFORMATION In connection with the new strategic business plan announced at the beginning of 2015, the Group has
realigned its internal organisational structure and changed the composition of its reportable segments
accordingly. The new organisational structure is based on a Group-wide omni-channel go-to-market
approach. The internal reporting of the Group for management purposes for the brands adidas and
Reebok is now structured by markets rather than by distribution channels. As a consequence, of the
six initial operating segments, the operating segments Wholesale and Retail were replaced by regional
markets. Reflecting this development, the Group has restated the segmental information for the year
ending December 31, 2014.
As at December 31, 2015, following the Group’s new internal management reporting by markets and
in accordance with the definition of IFRS 8 ‘Operating Segments’, 13 operating segments were identified:
Western Europe, North America, Greater China, Russia/CIS, Latin America, Japan, Middle East, South
Korea, Southeast Asia/Pacific, TaylorMade-adidas Golf, Reebok-CCM Hockey, Runtastic and Other
centrally managed businesses. Due to the divestiture of the Rockport operating segment on July 31, 2015,
income and expenses of the Rockport operating segment are reported as discontinued operations as at
December 31, 2015 and 2014, respectively. The markets Middle East, South Korea and Southeast Asia/
Pacific were aggregated to the segment MEAA (’Middle East, Africa and other Asian markets’). According
to the criteria of IFRS 8 for reportable segments, the business segments Western Europe, North America,
Greater China, Russia/CIS, Latin America, Japan and MEAA are reported separately. The remaining operating
segments are aggregated under Other Businesses due to their only subordinate materiality. Historic and
estimated future economic indicators that have been assessed in determining that the aggregated operating
segments share similar characteristics were profitability characteristics on net margin and contribution
level, Gross Domestic Product (GDP) growth rates as well as consumer price inflation.
Each market comprises all wholesale, retail and e-commerce business activities relating to the
distribution and sale of adidas and Reebok products to retail customers and end consumers.
24 0
4
Consolidated F inancial Statements
Notes – Additional Information
The operating segment TaylorMade-adidas Golf comprises the brands TaylorMade, adidas Golf, Adams
Golf and Ashworth.
Rockport predominantly designs and distributes leather footwear for men and women.
Reebok-CCM Hockey designs, produces and distributes ice hockey equipment such as sticks, skates
and protection gear. In addition, Reebok-CCM Hockey designs, produces and distributes apparel mainly
under the brand names Reebok Hockey and CCM.
Runtastic operates in the digital health and fitness space. The company provides a comprehensive
ecosystem for tracking and managing health and fitness data.
Other centrally managed businesses primarily includes the business activities of the labels Y-3 and
Porsche Design Sport by adidas as well as the business activities of the brand Five Ten in the outdoor action
sports sector. Furthermore, the segment also comprises the own-retail activities of the adidas neo label
as well as International Clearance Management.
Certain centralised Group functions do not meet the definition of IFRS 8 for a reportable operating
segment. This includes functions such as Global Brands and Global Sales (central brand and distribution
management for the brands adidas and Reebok), central treasury, global sourcing as well as other
headquarter departments. Assets, liabilities, income and expenses relating to these corporate functions
are presented together with other non-allocable items and intersegment eliminations in the reconciliations.
The chief operating decision maker for the adidas Group has been defined as the joint Executive Board
of adidas AG.
There are no intersegment sales between the reportable segments. Accounting and valuation
policies applied for reporting segmental information are the same as those used for the adidas Group
SE E N OTE 02 .
The results of the operating segments are reported in the line item ‘Segmental operating profit’. This
was formerly defined as gross profit minus costs directly attributable to the segment or the group of
segments (primarily sales and logistics costs) before expenditure for marketing investments and operating
overhead costs not directly attributable. As of January 1, 2015, segmental operating profit is defined as
gross profit minus other operating expenses (including expenditure for marketing investments) plus royalty
and commission income and other operating income attributable to the segment or group of segments
(operating profit).
Segmental assets include accounts receivable as well as inventories. Only these items are reported
to the chief operating decision maker on a regular basis. Depreciation, amortisation, impairment losses
(except for goodwill) and reversals of impairment losses as well as capital expenditures for tangible
and intangible assets are part of the segmental reporting, even though segmental assets do not contain
tangible and intangible assets. Depreciation and amortisation as well as impairment losses and reversals
of impairment losses not directly attributable to a segment or a group of segments are presented under
HQ/Consolidation in the reconciliations.
Segmental liabilities only contain accounts payable from operating activities as there are no other
liability items reported regularly to the chief operating decision maker.
Interest income and interest expenses as well as income taxes are not allocated to the reportable
segments and are not reported separately to the chief operating decision maker.
241
4
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Notes – Additional Information
SEGMENTAL INFORMATION I
€ in millions Net sales (non-Group) 1 Segmental operating profit 1 Segmental assets 2 Segmental liabilities 2
Western Europe 4,539 3,793 909 666 1,327 1,013 145 122
North America 2,753 2,217 69 120 891 744 96 47
Greater China 2,469 1,786 866 617 465 335 146 109
Russia/CIS 739 1,098 85 173 204 226 6 17
Latin America 1,783 1,612 235 199 619 629 63 91
Japan 776 744 147 121 233 243 34 75
MEAA 2,388 1,925 664 555 633 553 77 67
Other Businesses (continuing operations) 1,467 1,358 (89) (57) 684 709 117 134
Other Businesses (discontinued operations) 159 283 (18) 19 0 139 0 37
Other Businesses (total) 1,627 1,641 (107) (38) 684 848 117 171
Total 17,075 14,817 2,869 2,413 5,056 4,591 683 699
SEGMENTAL INFORMATION II
Western Europe 63 35 33 27 4 5
North America 32 32 21 18 7 6
Greater China 76 56 43 34 1 (0)
Russia/CIS 16 29 24 39 2 4
Latin America 30 35 22 22 2 –
Japan 13 8 10 9 0 0
MEAA 35 31 27 20 1 (0)
Other Businesses (continuing operations) 18 20 20 17 1 1
Other Businesses (discontinued operations) 4 6 4 7 (0) (0)
Other Businesses (total) 22 26 24 23 1 1
Total 287 253 204 191 18 16
Reconciliations
The following tables include reconciliations of segmental information to the aggregate numbers of the
consolidated financial statements, taking into account items which are not directly attributable to a segment
or a group of segments.
242
4
Consolidated F inancial Statements
Notes – Additional Information
OPERATING PROFIT
Operating profit of centralised functions which do not represent a segment, such as Global Brands and
Global Sales (central brand and distribution management for the brands adidas and Reebok), central
treasury and global sourcing as well as other headquarter departments, is shown under HQ/Consolidation.
CAPITAL EXPENDITURE
Reportable segments 16 15
Other Businesses 1 1
Reclassification to discontinued operations 0 0
HQ/Consolidation 35 78
Total 52 94
243
4
Consolidated F inancial Statements
Notes – Additional Information
ASSETS
LIABILITIES
Product information
Geographical information
Net sales (non-Group) are shown in the geographic market in which the net sales are realised. Non-current
assets are allocated to the geographic market based on the domicile of the respective subsidiary independent
of the segmental structure and consist of tangible assets, goodwill, trademarks, other intangible assets
and other non-current assets.
24 4
4
Consolidated F inancial Statements
Notes – Additional Information
GEOGRAPHICAL INFORMATION
Year ending Year ending Dec. 31, 2015 Dec. 31, 2014
Dec. 31, 2015 Dec. 31, 2014
With regard to Germany, Western Europe contains net sales (non-Group) (continuing operations)
amounting to € 936 million and € 891 million as well as non-current assets amounting to € 846 million
and € 806 million for the years 2015 and 2014, respectively. With regard to the USA, North America contains
net sales (non-Group) (continuing operations) amounting to € 3.091 billion and € 2.579 billion as well as
non-current assets amounting to € 967 million and € 940 million for the years 2015 and 2014, respectively.
37 In 2015, the increase in cash generated from operating activities compared to the prior year was primarily
ADDITIONAL CASH due to an increase in income before taxes, partly offset by an increase in income taxes paid.
FLOW INFORMATION Net cash outflow from investing activities in 2015 mainly related to spending for property, plant and
equipment such as investments in the furnishing and fitting of own-retail stores, in new office buildings,
warehouses and IT systems as well as to the acquisition of Runtastic. These cash outflows were partly
offset by proceeds from the divestiture of the Rockport operating segment.
Cash outflows from financing activities mainly related to the dividend paid to shareholders of adidas AG
and to the repurchase of treasury shares.
245
4
Consolidated F inancial Statements
Notes – Additional Information
Commitments with respect to promotion and advertising contracts maturing after five years have remaining
terms of up to 15 years from December 31, 2015.
Compared to December 31, 2014, commitments for promotion and advertising contracts mainly
increased due to the prolongation of the existing partnership with FC Bayern München.
Information regarding commitments under lease and service contracts is also included in these Notes
SEE N OTE 28 .
39 According to the definitions of IAS 24 ‘Related Party Disclosures’, the Supervisory Board and the Executive
RELATED PARTY Board of adidas AG were identified as related parties who solely received remuneration in connection with
DISCLOSURES their function as key management personnel. For information about the remuneration of the Supervisory
Board and the Executive Board of adidas AG SE E N OT E 4 0 and SE E CO M P E N SAT I O N R E PO RT, P. 3 6 .
In addition, adidas Pension Trust e.V., a registered association, is regarded as a related party. Based
on a Contractual Trust Arrangement, adidas Pension Trust e.V. manages the plan assets in the form of
an administrative trust to fund and protect part of the pension obligations of adidas AG S E E NOTE 24 .
Employees, senior executives and members of the Executive Board of adidas AG can be members of the
registered association. adidas AG has the right to claim a refund of pension payments from adidas Pension
Trust e.V. under specific contractually agreed conditions.
40 Employees
OTHER The average numbers of employees (continuing operations) are as follows:
INFORMATION
EMPLOYEES
24 6
4
Consolidated F inancial Statements
Notes – Additional Information
Executive Board
In 2015, the overall compensation of the members of the Executive Board totalled € 12.0 million (2014:
€ 5.9 million), € 7.4 million thereof relates to short-term benefits (2014: € 5.9 million) and € 4.6 million to
long-term benefits (2014: € 0.0 million). Post-employment benefits (costs for accrued pension entitlements
for members of the Executive Board) totalled € 1.8 million (2014: € 2.8 million).
In 2015, former members of the Executive Board and their survivors received pension payments totalling
€ 3.5 million (2014: € 3.5 million).
Pension obligations relating to former members of the Executive Board and their survivors amount in
total to € 55.4 million (2014: € 59.5 million).
Members of the Executive Board were not granted any loans in 2015.
Further information on disclosures according to § 314 section 1 no. 6a German Commercial Code
(Handelsgesetzbuch – HGB) is provided in the Compensation Report SE E CO M P E N SAT I O N R E P O RT, P. 3 6 .
247
4
Consolidated F inancial Statements
Statement of Movements of Intangible and Tangible Assets
STATEMENT OF MOVEMENTS OF
INTANGIBLE AND TANGIBLE ASSETS
STATEMENT OF MOVEMENTS OF INTANGIBLE AND TANGIBLE ASSETS € IN MILLIONS
Acquisition cost
January 1, 2014 1,533 1,419 704
Currency effect 111 193 36
Additions – – 48
Increase in companies consolidated – – 7
Transfers to assets held for sale (56) (180) (15)
Transfers – – (20)
Disposals – (0) (31)
December 31, 2014/January 1, 2015 1,588 1,432 730
Currency effect 99 164 36
Additions – – 49
Increase in companies consolidated 192 31 16
Transfers – – 37
Disposals – (0) (2)
December 31, 2015 1,879 1,628 865
24 8
4
Consolidated F inancial Statements
Statement of Movements of Intangible and Tangible Assets
Attachment I
Internally generated Total intangible Land, land leases, Technical equipment Other equipment, Construction Total tangible
software assets buildings and leasehold and machinery furniture and fixtures in progress assets
improvements
249
4
Consolidated F inancial Statements
Shareholdings
SHAREHOLDINGS
SHAREHOLDINGS OF ADIDAS AG, HERZOGENAURACH AT DECEMBER 31, 2015 Attachment II
Germany
1 adidas Insurance & Risk Consultants GmbH 2 Herzogenaurach (Germany) EUR 26 directly 100
2 adidas Beteiligungsgesellschaft mbH 2 Herzogenaurach (Germany) EUR 681,990 directly 100
3 adidas CDC Immobilieninvest GmbH Herzogenaurach (Germany) EUR 11,764 13 100
4 adidas Verwaltungsgesellschaft mbH 3 Herzogenaurach (Germany) EUR 4,340 90 100
1 The number refers to the number of the company 2 Profit and loss transfer agreement 3 Company with no active business
4 Sub-group Taylor Made Golf Limited 5 Sub-group adidas India Private Ltd. 6 Sub-group Taylor Made Golf Co., Inc.
7 Sub-group Sports Licensed Division of the adidas Group, LLC 8 Sub-group Reebok-CCM Hockey U.S., Inc.
9 Sub-group Reebok International Limited 10 Sub-group Reebok International Ltd.
250
4
Consolidated F inancial Statements
Shareholdings
North America
75 adidas North America, Inc. Portland, Oregon (USA) USD 5,232,854 9 100
76 adidas America, Inc. Portland, Oregon (USA) USD 131,187 75 100
77 adidas International, Inc. Portland, Oregon (USA) USD 68,767 75 100
78 adidas Team, Inc. 3 Portland, Oregon (USA) USD (1,013) 75 100
79 Taylor Made Golf Co., Inc. 6 Carlsbad, California (USA) USD (84,512) 75 100
80 Ashworth, LLC. 3, 6 Carlsbad, California (USA) USD – 79 100
81 The Reebok Worldwide Trading Company, LLC Wilmington, Delaware (USA) USD 15,708 88 100
82 Reebok Securities Holdings LLC 10 Wilmington, Delaware (USA) USD – 88 100
1 The number refers to the number of the company 2 Profit and loss transfer agreement 3 Company with no active business
4 Sub-group Taylor Made Golf Limited 5 Sub-group adidas India Private Ltd. 6 Sub-group Taylor Made Golf Co., Inc.
7 Sub-group Sports Licensed Division of the adidas Group, LLC 8 Sub-group Reebok-CCM Hockey U.S., Inc.
9 Sub-group Reebok International Limited 10 Sub-group Reebok International Ltd.
251
4
Consolidated F inancial Statements
Shareholdings
Asia
95 adidas Sourcing Limited Hong Kong (China) USD 143,068 10 100
96 adidas Services Limited Hong Kong (China) USD 11,107 9 100
97 adidas Hong Kong Ltd. Hong Kong (China) HKD 365,454 2 100
98 Smedley Industries (Hong Kong) Limited 3, 8 Hong Kong (China) HKD – 90 100
99 Reebok Trading (Far East) Limited Hong Kong (China) USD 31,091 88 100
100 adidas (Suzhou) Co. Ltd. Suzhou (China) CNY (225,225) 2 100
101 adidas Sports (China) Co. Ltd. Suzhou (China) CNY 8,837,583 2 100
102 adidas (China) Ltd. Shanghai (China) CNY 572,969 9 100
103 Zhuhai adidas Technical Services Limited Zhuhai (China) CNY 12,283 95 100
104 adidas Logistics (Tianjin) Co., Ltd. Tianjin (China) CNY 131,248 14 100
105 adidas Business Services (Dalian) Limited Dalian (China) CNY 5,331 9 100
106 adidas Japan K.K. Tokyo (Japan) JPY 11,024,465 9 100
107 Taylor Made Golf Co., Ltd. Tokyo (Japan) JPY 4,119,035 9 100
108 adidas Korea Ltd. Seoul (Korea) KRW 213,052,012 directly 100
109 Taylor Made Korea Ltd. Seoul (Korea) KRW 3,054,558 directly 100
110 adidas Korea Technical Services Limited Pusan (Korea) KRW 3,830,325 95 100
111 adidas India Private Ltd. 5 New Delhi (India) INR 4,185,651 directly 10.68
9 89.32
112 adidas India Marketing Pvt. Ltd. 5 New Delhi (India) INR – 111 98.99
9 1.01
113 adidas Technical Services Pvt. Ltd. New Delhi (India) USD 3,410 95 100
114 Reebok India Company New Delhi (India) INR (22,194,862) 124 93.15
115 PT adidas Indonesia Jakarta (Indonesia) IDR 170,326,667 9 99
directly 1
116 adidas (Malaysia) Sdn. Bhd. Petaling Jaya (Malaysia) MYR 44,093 directly 60
9 40
117 adidas Philippines Inc. Pasig City (Philippines) PHP 624,689 directly 100
118 adidas Singapore Pte. Ltd. Singapore (Singapore) SGD 10,515 directly 100
119 adidas Taiwan Limited Taipei (Taiwan) TWD 1,171,313 9 100
120 adidas (Thailand) Co., Ltd. Bangkok (Thailand) THB 976,853 directly 100
121 adidas Australia Pty Limited Mulgrave (Australia) AUD 65,084 9 100
1 The number refers to the number of the company 2 Profit and loss transfer agreement 3 Company with no active business
4 Sub-group Taylor Made Golf Limited 5 Sub-group adidas India Private Ltd. 6 Sub-group Taylor Made Golf Co., Inc.
7 Sub-group Sports Licensed Division of the adidas Group, LLC 8 Sub-group Reebok-CCM Hockey U.S., Inc.
9 Sub-group Reebok International Limited 10 Sub-group Reebok International Ltd.
252
4
Consolidated F inancial Statements
Shareholdings
122 adidas New Zealand Limited Auckland (New Zealand) NZD 6,305 directly 100
123 adidas Vietnam Company Limited Ho Chi Minh City (Vietnam) VND 10,627,500 9 100
124 Reebok (Mauritius) Company Limited Port Louis (Mauritius) USD 2,194 88 99
81 1
Latin America
125 adidas Argentina S.A. Buenos Aires (Argentina) ARS 1,016,276 9 51.73
2 48.27
126 Reebok Argentina S.A. Buenos Aires (Argentina) ARS 41,236 10 73.86
9 26.13
127 ASPA do Brasil Ltda. 3 São Paulo (Brazil) BRL 127 95 100
128 adidas do Brasil Ltda. São Paulo (Brazil) BRL 54,816 2 100
129 adidas Franchise Brasil Servicos Ltda. São Paulo (Brazil) BRL 9,426 128 100
130 Reebok Produtos Esportivos Brasil Ltda. Jundiai (Brazil) BRL (86,450) 9 99.99
131 adidas Chile Limitada Santiago de Chile (Chile) CLP 94,456,521 directly 99
1 1
132 adidas Colombia Ltda. Bogotá (Colombia) COP 13,526,824 directly 100
133 adidas Perú S.A.C. Lima (Peru) PEN 73,595 directly 99.21
131 0.79
134 adidas de Mexico, S.A. de C.V. Mexico City (Mexico) MXN (86,778) directly 100
135 adidas Industrial, S.A. de C.V. Mexico City (Mexico) MXN 197,465 directly 100
136 Reebok de Mexico, S.A. de C.V. 3 Mexico City (Mexico) MXN (477,289) directly 100
137 adidas Latin America, S.A. Panama City (Panama) USD (57,243) directly 100
138 Concept Sport, S.A. Panama City (Panama) USD 1,016 9 100
139 adidas Market LAM, S.A. 3 Panama City (Panama) USD 0 9 100
140 3 Stripes S.A. (adidas Uruguay) 3 Montevideo (Uruguay) UYU (436) directly 100
141 Tafibal S.A. Montevideo (Uruguay) UYU (62,540) directly 100
142 Raelit S.A. Montevideo (Uruguay) UYU (4,079) directly 100
143 Reebok Central America S.A. 10 San Pedro Sula (Honduras) HNL – 88 99.6
81 0.4
144 adidas Corporation de Venezuela, S.A. 3 Caracas (Venezuela) VEF (17) directly 100
145 adisport Corporation San Juan (Puerto Rico) USD (2,700) 9 100
1 The number refers to the number of the company 2 Profit and loss transfer agreement 3 Company with no active business
4 Sub-group Taylor Made Golf Limited 5 Sub-group adidas India Private Ltd. 6 Sub-group Taylor Made Golf Co., Inc.
7 Sub-group Sports Licensed Division of the adidas Group, LLC 8 Sub-group Reebok-CCM Hockey U.S., Inc.
9 Sub-group Reebok International Limited 10 Sub-group Reebok International Ltd.
253
ADDI –
TIONAL
Ten-Year Overview 256
Glossary 260
Declaration of Support 263
Financial Calendar 264
INFOR –
MATION
5
A dditional Information
Ten-Year Overview
TEN-YEAR OVERVIEW
TEN-YEAR OVERVIEW
256
5
A dditional Information
Ten-Year Overview
257
5
A dditional Information
Ten-Year Overview
TEN-YEAR OVERVIEW CONTINUED
Employees
Number of employees at year-end 3 55,555 53,731 49,808
Personnel expenses 3 (€ in millions) 2,184 1,842 1,833
258
5
A dditional Information
Ten-Year Overview
259
5
A dditional Information
Glossary
GLOSSARY
/A
ATHLEISURE CONTROLLED SPACE
The term is composed of the words athletic and leisure. It describes Includes own-retail business, mono-branded franchise stores,
a fashion trend of sportswear no longer being just meant for shop-in-shops, joint ventures with retail partners and co-branded
training but increasingly shaping everyday clothing. stores. Controlled space offers a high level of brand control and
ensures optimal product offering and presentation according to
/B brand requirements.
/C
CAPITAL EXPENDITURE /E
Total cash expenditure used for the purchase of tangible and EMERGING MARKETS
intangible assets, excluding acquisitions and finance leases. Developing countries showing potential for growth in both economic
strength and private wealth in the future. For the adidas Group,
CASH POOLING emerging markets are the developing countries of Asia, Eastern
A cash management technique for physical concentration of Europe, Latin America and Africa.
cash. Cash pooling allows the adidas Group to combine credit and
debit positions from various accounts and several subsidiaries
into one central account. This technique supports our in-house /F
bank concept where advantage is taken of any surplus funds of FINANCIAL LEVERAGE
subsidiaries to cover cash requirements of other subsidiaries, thus Ratio reflecting the role of borrowings within the financing structure
reducing external financing needs and optimising our net interest of a company.
expenses. net borrowings
Financial leverage = × 100
shareholders’ equity
COMPARABLE (COMP) STORE SALES
Sales generated in stores which have been open for the entire
prior financial year and are currently operating. Remodelled stores FIRST FAST SPORTS COMPANY
are included if the store format and store size have remained We have set ourselves the goal to become the first fast sports
unchanged. Comparable store sales therefore show the organic company by 2020. This means that it is our ambition to increase
growth of the retail business and do not include sales generated the share of so-called ‘speed-enabled products’ to 50% of our net
from new store openings. sales by 2020 from 15% of net sales in 2015. Our initiatives will
put us in the position to provide consumers with appealing and
CONCESSION CORNERS up-to-date products. As a consequence, our full-price share of
Retail space that is fully operated by one brand of the adidas Group sales is forecasted to improve by 20 percentage points by 2020.
and is part of a larger sales area operated by a retail partner.
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Glossary
/G
GENDERDAX LIQUIDITY I, II, III
An industry- and science-based gender and diversity project, The liquidity ratio indicates how quickly a company can liquidate
including a ranking of German companies which are committed its assets to pay for current liabilities.
to actively supporting highly qualified and career-oriented women Cash + short-term financial assets
Liquidity I = × 100
within their human resource and diversity management. current liabilities
GOODWILL /M
Intangible asset that quantifies the price that a buyer of a company MARKETING INVESTMENTS
has paid for the reputation, know-how and market position of the Promotion and communication spending including sponsorship
acquired company. Goodwill is the excess of the amount paid over contracts with teams and individual athletes, as well as advertising,
the fair value of the net assets acquired at the purchase date. It is events and other communication activities, but excluding marketing
stated at cost and tested for impairment annually or on such other overhead expenses.
occasions that events or changes in circumstances indicate that
it might be impaired.
/N
GREEN GRASS RETAILERS NET CASH/NET BORROWINGS
Golf distribution channel. Small golf specialty shops typically Net cash is when the sum of cash and short-term financial assets
located at a golf course. exceeds gross borrowings. Net borrowings is the portion of gross
borrowings not covered by the sum of cash and short-term financial
/H assets.
cash and cash equivalents
+ short-term financial assets
Net cash/net borrowings =
HARDWARE – short-term borrowings
– long-term borrowings
A product category which comprises equipment that is used rather
than worn by the consumer, such as bags, balls, fitness equipment,
golf clubs and hockey sticks. NET PROMOTER SCORE (NPS)
A survey-based measure of how likely people are to recommend a
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Glossary
/O /R
OMNI-CHANNEL SALES APPROACH ROLLING FORECAST
Describes the ambition to achieve a globally consistent product A projection about the future that is updated at regular intervals,
offer, brand communication, availability and service across all keeping the forecasting period constant (e.g. twelve months).
sales channels (wholesale, retail and e-commerce) and consumer
touchpoints.
/S
OPERATING CASH FLOW SEGMENT
Comprises operating profit, change in operating working capital Also called business segment. The adidas Group is currently
and net investments. divided into 13 business segments: Western Europe, North
operating profit America, Greater China, Russia/CIS, Latin America, Japan, Middle
+/– change in operating working capital
Operating cash flow = +/– net investments East, South Korea, Southeast Asia/Pacific, TaylorMade-adidas Golf,
(capital expenditure less depreciation Reebok-CCM Hockey, Runtastic and Other centrally managed
and amortisation)
businesses.
PROMOTION PARTNERSHIPS /V
Partnerships with events, associations, leagues, clubs and VERTICAL RETAILER
individual athletes. In exchange for the services of promoting the A retail company that (vertically) controls the entire design,
adidas Group, the party is provided with products and/or cash and/ production and distribution processes of its products.
or promotional materials.
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Declaration of Support
DECLARATION OF SUPPORT
adidas AG declares support, except in the case of political risk, that the below-mentioned companies are able to meet their contractual
liabilities. This declaration replaces the declaration dated February 13, 2015, which is no longer valid.
adidas (China) Ltd., Shanghai, China adidas Insurance & Risk Consultants GmbH, adidas Sverige AB, Solna, Sweden
adidas (Cyprus) Limited, Nicosia, Cyprus Herzogenaurach, Germany adidas Taiwan Limited, Taipei, Taiwan
adidas (Ireland) Limited, Dublin, Ireland adidas International B.V., Amsterdam, adidas Trgovina d.o.o., Ljubljana, Slovenia
adidas (Malaysia) Sdn. Bhd., Petaling Jaya, Netherlands adidas Vietnam Company Limited, Ho Chi Minh
Malaysia adidas International Finance B.V., Amsterdam, City, Vietnam
adidas (South Africa) (Pty) Ltd., Cape Town, Netherlands adisport Corporation, San Juan, Puerto Rico
South Africa adidas International Marketing B.V., Concept Sport, S.A., Panama City, Panama
adidas (Suzhou) Co. Ltd., Suzhou, China Amsterdam, Netherlands Global Merchandising, S.L., Madrid, Spain
adidas (Thailand) Co., Ltd., Bangkok, Thailand adidas International Property Holding B.V., Hydra Ventures B.V., Amsterdam, Netherlands
adidas (UK) Limited, Stockport, Great Britain Amsterdam, Netherlands LLC ‘adidas, Ltd.’, Moscow, Russia
adidas America, Inc., Portland, Oregon, USA adidas International Re Limited, Dublin, PT adidas Indonesia, Jakarta, Indonesia
adidas Argentina S.A., Buenos Aires, Argentina Ireland Raelit S.A., Montevideo, Uruguay
adidas Australia Pty. Limited, Mulgrave, adidas International Trading B.V., Amsterdam, Reebok Argentina S.A., Buenos Aires,
Australia Netherlands Argentina
adidas Austria GmbH, Klagenfurt, Austria adidas International, Inc., Portland, Oregon, Reebok International Limited, London, Great
adidas Baltics SIA, Riga, Latvia USA Britain
adidas Belgium N.V., Brussels, Belgium adidas Italy S.p.A, Monza, Italy Reebok International Ltd., Canton,
adidas Benelux B.V., Amsterdam, Netherlands adidas Japan K.K., Tokyo, Japan Massachusetts, USA
adidas Budapest Kft., Budapest, Hungary adidas Korea Ltd., Seoul, Korea Reebok Produtos Esportivos Brasil Ltda.,
adidas Bulgaria EAD, Sofia, Bulgaria adidas Latin America, S.A., Panama City, Jundiaí, Brazil
adidas Business Services (Dalian) Limited, Panama Reebok-CCM Hockey AB, Solna, Sweden
Dalian, China adidas LLP, Almaty, Republic of Kazakhstan Reebok-CCM Hockey AS, Gressvik, Norway
adidas Business Services Lda., Maia, Portugal adidas Logistics (Tianjin) Co., Ltd., Tianjin, Reebok-CCM Hockey Oy, Espoo, Finland
adidas Canada Ltd., Woodbridge, Ontario, China Reebok-CCM Hockey U.S. Inc., Montpelier,
Canada adidas New Zealand Limited, Auckland, New Vermont, USA
adidas CDC Immobilieninvest GmbH, Zealand Reebok Israel Ltd., Holon, Israel
Herzogenaurach, Germany adidas Norge AS, Lillestrom, Norway SC ‘adidas-Ukraine’, Kiev, Ukraine
adidas Chile Limitada, Santiago de Chile, Chile adidas North America, Inc., Portland, Oregon, Spartanburg DC, Inc., Spartanburg, South
adidas Colombia Ltda., Bogotá, Colombia USA Carolina, USA
adidas CR s.r.o., Prague, Czech Republic adidas Peru S.A.C., Lima, Peru Sport Maska Inc., New Brunswick, Canada
adidas Croatia d.o.o., Zagreb, Croatia adidas Philippines Inc., Pasig City, Philippines Sports Licensed Division of the adidas Group,
adidas Danmark A/S, Århus, Denmark adidas Poland Sp.z o.o., Warsaw, Poland LLC, Boston, Massachusetts, USA
adidas de Mexico, S.A. de C.V., Mexico City, adidas Portugal – Artigos de Desporto, S.A., Stone Age Equipment, Inc., Redlands,
Mexico Lisbon, Portugal California, USA
adidas do Brasil Ltda., São Paulo, Brazil adidas Romania S.R.L., Bucharest, Romania Tafibal S.A., Montevideo, Uruguay
adidas Emerging Markets FZE, Dubai, United adidas Serbia d.o.o., New Belgrade, Serbia Taylor Made Golf Co., Inc., Carlsbad, California,
Arab Emirates adidas Services Limited, Hong Kong, China USA
adidas Emerging Markets L.L.C., Dubai, United adidas Singapore Pte. Ltd., Singapore, Taylor Made Golf Co., Ltd., Tokyo, Japan
Arab Emirates Singapore Taylor Made Golf Limited, Basingstoke, Great
adidas España S.A.U, Zaragoza, Spain adidas Slovakia s.r.o., Bratislava, Slovak Britain
adidas France S.a.r.l., Landersheim, France Republic Taylor Made Korea Ltd., Seoul, Korea
adidas Hellas A.E., Athens, Greece adidas Sourcing Limited, Hong Kong, China Textronics, Inc., Wilmington, Delaware, USA
adidas Hong Kong Ltd., Hong Kong, China adidas Spor Malzemeleri Satis ve Pazarlama Trafford Park DC Limited (formerly Reebok
adidas Imports & Exports Ltd., Cairo, Egypt A.S., Istanbul, Turkey Finance Limited), London, Great Britain
adidas India Marketing Pvt. Ltd., New Delhi, adidas sport gmbh, Cham, Switzerland
India adidas Sporting Goods Ltd., Cairo, Egypt
adidas Industrial, S.A. de C.V., Mexico City, adidas Sports (China) Co. Ltd., Suzhou, China
Mexico adidas Suomi Oy, Helsinki, Finland
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Financial Calendar
FINANCIAL
CALENDAR 2016
MARCH MAY MAY
03
FULL YEAR 2015
04
FIRST QUARTER 2016
12
ANNUAL GENERAL
RESULTS RESULTS MEETING
Press conference in Press release, conference call Fuerth (Bavaria), Germany
Herzogenaurach, Germany and webcast Webcast
Press release, conference call Publication of First Quarter 2016 Report
and webcast
Publication of 2015 Annual Report
264
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AG
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